What is a key criterion involved in deciding a natural monopoly?
a. Size of the firm relative to its competitors.
b. Size of the firm relative to the total market demand for a product.
c. Magnitude of profits generated by the company.
d. A firm's ability to adapt to market changes.
b
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A credible promise is:
A. possible to keep. B. made by a honest person. C. in the promiser's interest to keep. D. legally enforceable.
For the U.S. economy, the largest expenditure category is:
A) government expenditures. B) net export expenditures. C) personal consumption expenditures. D) investment expenditures.
What happens to M1 and M2 due to each of the following changes?
(a) You take $500 out of your checking account and put it into a passbook savings account. (b) You take $1000 out of your checking account and buy traveler's checks. (c) You take $1500 out of your money—market mutual fund and deposit into your checking account. (d) You cash in $2000 in savings bonds and invest the money in a certificate of deposit.
Which of the following statements best describes price ceilings?
a. A price ceiling that is set at a relatively high level is nonbinding. b. A price ceiling that is set at a relatively low level is nonbinding. c. A price ceiling that is set at a relatively high level will have no practical effect unless the equilibrium price falls below the price ceiling. d. A price ceiling that is set at a relatively low level will have no practical effect unless the equilibrium price soars high enough to exceed the price ceiling.