The relevant market is defined as the set of goods whose
a. price elasticities of demand are low
b. cross elasticities with other goods outside the set are high
c. price elasticities of demand are high
d. income elasticities of demand are high
e. cross elasticities with other goods in the set are high
E
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A key reason that Congress established the Fed to act as a lender of last resort was to prevent ________, the process by which a run on one bank spreads to other banks, resulting in a bank panic
A) contagion B) asset inflation C) moral hazard D) bailouts
If the government wants a natural monopoly to earn a "fair return" or zero economic profit, it will set
a. price equal to marginal cost. b. price equal to average total cost. c. price equal to average revenue. d. marginal cost equal to marginal revenue. e. marginal cost equal to average total cost.
If the minimum wage exceeds the equilibrium wage, then
A. there will be no unemployment. B. the minimum wage will not be binding. C. the quantity supplied of labor will exceed the quantity demanded. D. the quantity demanded of labor will exceed the quantity supplied.
Real wealth changes with
A. disposable income. B. consumption. C. the price level. D. GDP.