If a government has a budget deficit, it must
a. increase taxes.
b. borrow in the loanable funds market.
c. decrease taxes.
d. lower the real interest rate.
e. decrease its expenditures.
Answer: b. borrow in the loanable funds market.
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The payoff matrix below shows the daily profit for two firms, Row Restaurant and Column Cafe, for two different strategies, publishing coupons in the student paper and not publishing coupons in the student paper. 
If Row Restaurant publishes coupons, Column Cafe would earn the highest profit if it:
A. did not publish coupons. B. chooses either strategy because Column Cafe will have the same profit in either case. C. also published coupons. D. only offered coupons half of the time.
Holding other things constant, increases in the price level in the US will
a. Cause the dollar to gain value b. Cause the dollar to lose value c. Does not affect the dollar value d. None of the above
A welfare loss occurs when a monopolist chooses not to produce units of output that are of greater marginal value to consumers than the marginal cost of producing them
a. True b. False Indicate whether the statement is true or false
Profit is defined as
a. net revenue minus depreciation. b. total revenue minus total cost. c. average revenue minus average total cost. d. marginal revenue minus marginal cost.