Economic analysis is useful is resolving all of the following types of issues EXCEPT:
A. positive
B. monetary policy
C. normative
D. fiscal policy
Answer: C
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Refer to the scenario above. The winner of this auction will earn a consumer surplus of ________
A) $450 B) $50 C) $150 D) $100
While labor unions tend to negotiate above-equilibrium wage rates for their members, they also tend to reduce the quantity of labor hired
Indicate whether the statement is true or false
If an oligopolistic firm in a game theory kind of market cuts price, in the long run
a. the other firms will follow and all firms will be worse off b. the price cutter will be worse off if other firms don't cut price as well because revenue equals price times output and since price was cut, its revenue must be less c. its market share and profit will increase at the expense of its rivals d. the other firms will follow and all firms will be better off because at lower prices, industry sales will increase e. it will become a monopoly, having outsmarted its rivals, and will be able to raise the price again. That's how the game is played.
A bank might make mortgages to people in different regions of the country. By doing so
a. the bank reduces the risk it faces from falling house prices in its region and falling prices in all regions. b. the bank reduces the risk it faces of falling house prices in its region but not from falling prices in all regions. c. the bank reduces the risk it faces of falling house prices in all regions, but not the risk it faces from falling house prices in its regions. d. the bank reduces neither the risk it faces from falling house prices in its region nor falling prices in all regions.