In 1935, John Hicks wrote, “The best of all monopoly profits is a quiet life.” What did he mean?
a. That monopolies are the best form of business enterprise
b. That monopolies do not hire unionized workers
c. That monopolies have no incentive to work at pleasing their customers
d. That a quiet life is more important than high profits
c. That monopolies have no incentive to work at pleasing their customers
John Hicks, who won the Nobel Prize for economics in 1972, did not mean this comment in a complimentary way. He meant that monopolies may bank their profits and slack off on trying to please their customers.
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The most common estimate of the value of transactions used to estimate velocity is
a. real GDP. b. total sales. c. nominal GDP. d. cash balances.
One difference between a perfectly competitive market and a monopolistically competitive market is that
A) there is no product differentiation in monopolistic competition. B) there are no barriers to entry in monopolistic competition. C) there is no product differentiation in perfect competition. D) there is strategic interaction among firms in monopolistic competition. E) there are no barriers to exit in monopolistic competition.
Automatic stabilizers stabilize the level of real GDP because:
A. Congress quickly changes spending and tax revenue. B. federal expenditures and tax revenues change as the level of real GDP changes. C. the spending and tax multiplier are constant. D. wages are controlled by the minimum wage law.
If you own the only bookstore in a small town, do you have a monopoly?
What will be an ideal response?