Because monopolists are protected by high barriers to entry, they:
A. may be able to earn long-run economic profits.
B. will not minimize the per-unit cost of producing their output.
C. will price their product at the highest possible price.
D. seek economic profit; however, they are not able to earn it in the long run.
Answer: A
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The antitrust legislation that was designed to help small stores survive competition with large retail chains was the:
a. FTC Act. b. Sherman Antitrust Act. c. Celler-Kefauver Act. d. Robinson-Patman Act. e. Clayton Act.
Economic growth is:
A. an increase in our economy's potential output. B. represented by the long-run aggregate supply curve shifting to the right. C. a result of having more natural resources, land or capital. D. All of these are true.
Refer to the above diagram. If there is a movement away from the full employment of resources in an economy with production possibilities curve AB, this can be shown by:
A. a movement from point 2 to point 4. B. a shift of the curve from AB to CD. C. point 5 in the diagram. D. a movement from point 3 to point 1.
Exchange rate overshooting occurs
A. because product prices are sticky in the short run. B. only if investors and speculators react irrationally to any change in the monetary policies of the domestic or the foreign government. C. because interest rates are sticky. D. when one of the nations has a very high rate of inflation.