Under a pure system of laissez faire, the government would not do which of the following?
a. prosecute criminals
b. provide national defense
c. punish those involved in conspiracies to fix prices
d. establish minimum wages
d
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Universities are able to act as monopsonists in the market for professors because
A) a university usually does not consider hiring faculty members from another institution. B) faculty members usually have to move to a different city when changing universities. C) students like all of their professors. D) senior faculty members are willing to move to a new university at any cost.
Blanca would prefer a certain income of $20,000 to a gamble with a 0.5 probability of $10,000 and a 0.5 probability of $30,000. Based on this information:
A) we can infer that Blanca neutral. B) we can infer that Blanca is risk averse. C) we can infer that Blanca is risk loving. D) we cannot infer Blanca's risk preferences.
When promoting average cost pricing, regulators
A) include what they consider to be a normal rate of return on investment. B) encourage firms to produce at the output level where price equals marginal cost. C) fail to consider a return to investors, so regulated firms often have a hard time raising investment funds. D) inflate costs so much that price ends up as large as would prevail under unregulated monopoly.
Which of the following statements about the financial and real sectors is true?
A. For every real asset there is a financial asset. B. For every financial asset there is a real asset. C. For every real transaction there is a financial transaction. D. For every financial transaction there is a real transaction.