In a liquidity trap, the
A) IS curve is vertical.
B) IS curve is horizontal.
C) LM curve is vertical.
D) LM curve is horizontal.
D
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A nation can maximize the net benefits from immigration by:
A. Contracting immigration until the extra welfare cost for taxpayers is zero B. Expanding immigration until its marginal benefits equal its marginal costs C. Expanding immigration because it benefits society with a greater supply of products and increased demand for them D. Contracting immigration because the benefits are minor and it reduces the wage rates of domestic workers
A monopoly firm is different from a competitive firm in that:
A. a monopolist's demand curve is perfectly inelastic whereas a competitive firm's demand curve is perfectly elastic. B. a monopolist can influence market price whereas a competitive firm cannot. C. there are many substitutes for a monopolist's product whereas there are no substitutes for a competitive firm's product. D. a competitive firm has a U-shaped average cost curve whereas a monopolist does not.
In the above figure, if d1 is the relevant demand curve for this firm, then which level of output will maximize this firm's profits or minimize its losses?
A. A B. B C. C D. D
Ethan enjoys buying books and going to the movies. He has income of $150 to spend on these two goods each month. The price of a book is $15 and the price of going to the movies is also $15. He currently consumes four books and six movies a month. If the price of a book increases to $20, then:
A. the substitution and income effects would both predict Ethan would consume less of both goods. B. the substitution effect would predict Ethan would consume more books and less movies, and the income effect would predict he would consume less of both. C. the substitution and income effects would both predict Ethan would consume more of both goods. D. the substitution effect would predict Ethan would consume less books and more movies and the income effect would predict he would consume less of both.