Which statement about market power is incorrect?
A. It can lead to price increases that exploit consumers.
B. It can lead to resource misallocation.
C. It can lead to inefficient production and the lack of innovation.
D. Monopoly power can lead to decreases in producer surplus.
Answer: D
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Inferior goods have an income elasticity of demand that is
a. positive b. negative c. 0 d. greater than 1 in absolute value e. equal to 1 in absolute value
Taking action to reveal one's own private information is called:
A. screening. B. statistical discrimination. C. signaling. D. proofing.
Which of the following statements is likely to be made by an economist who believes in activist monetary policy? (1 ) The more closely monetary policy can be designed to meet the particulars of a given economic environment, the better. (2 ) Because of long and uncertain time lags, activist monetary policy may be destabilizing rather than stabilizing. (3 ) There is sufficient flexibility in wages
and prices in modern economies to allow the economy to equilibrate in reasonable speed at the natural level of Real GDP. (4 ) The "same-for-all-seasons" monetary policy is the way to proceed. (5 ) There is evidence that monetary policy in the mid-1970s caused a recession. A) (1), (2), and (3) B) (1), (4), and (5) C) (1 ) and (5) D) (4 ) and (5) E) (1), (3), and (4)
Which of these statements about the productivity of resources is true?
a. While labor can become more productive, natural resources cannot. b. Less productive resources result in more sustainable economic growth. c. Capital, labor, and natural resources can all become more productive. d. It is not possible to make a resource more productive.