In order to exercise control over the price of its product, a firm must be able to ________ competition.
A. not change
B. maximize
C. increase
D. limit
Answer: D
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Mercantilists wanted a favorable balance of trade, by which they meant
a. exports = imports. b. exports > imports. c. exports < imports. d. To import nothing from the colonies.
With a monopolist's outcome, consumer surplus is:
A. higher than that of a competitive market. B. lower than that of a competitive market. C. the same as that of a competitive market. D. Any of these is possible.
Consider an economy with only two goods: bread and wine. In 1982, the typical family bought 4 loaves of bread at 50¢ per loaf and 2 bottles of wine for $9 per bottle. In Year X, bread cost 75¢ per loaf and wine cost $10 per bottle. The CPI for Year X (using a 1982 base year) is:
A. 100. B. 115. C. 126. D. 130.
When the economy is experiencing inflation, an economist who follows the functional finance theorem is most likely to suggest that the government should:
A. run a balanced budget. B. run a deficit. C. do nothing. D. run a surplus.