The typical average cost curve
A. continually declines as output increases.
B. is horizontal.
C. continually increases as output increases.
D. first declines to a minimum and then increases as output increases.
Answer: D
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
If an industry is monopolized by one firm, the four-firm concentration ratio equals
A) 1 percent. B) 25 percent. C) 40 percent. D) 100 percent.
Using tradable allowances instead of quotas may be a better solution to the provision of common resources because they:
A. allocate the good in a less efficient way, and quotas do not. B. ensure that the resource is allocated to those with the highest willingness to pay, while quotas do not. C. assign private property rights-and an incentive, as owners, which means common resource now get overused, and quotas do not. D. allow the government to set a specific amount of the good to be consumed, while quotas do not.
The government currently has a time limit on welfare. Although families may be eligible for welfare on more than one occasion, eligibility per family runs out after
a. six months of benefits b. two years of benefits c. five years of benefits d. ten years of benefits e. never