The introduction of money market substitutes for basic checking accounts was fueled partially by the:
A. high number of bank failures that were occurring in the 1970s.
B. relatively high rates of inflation that existed in the late 1970s and early 1980s.
C. reluctance of many retailers to accept checks.
D. higher interest rates banks had to pay on checking accounts.
Answer: B
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When calculating GDP, purchases of used goods are
A) included at the original price. B) included by taking the original price and subtracting the (current) used price. C) included at the (current) used price. D) not included. E) included at the original price minus any depreciation.
Without restrictions, the market supply curve is horizontal at P = 5, and the inverse demand curve for taxi cab rides is P = 20 - Q in a competitive market. Subsequently, only 10 taxi cabs are allowed in the market
This results in a deadweight loss of A) 0. B) 5.5. C) 12.5. D) 25.
Thomas Edison once complained that he was not making a profit selling light bulbs because his plants were operating 25 percent below capacity. He estimated that he could increase output 25 percent with a 2 percent increase in the cost of production. He sold the 25 percent on the foreign market at a price below what he called the “cost of production.” We can deduce that Edison really meant
A. marginal cost was below average cost but less than marginal revenue. B. average cost exceeded variable cost, which exceeded marginal revenue. C. variable cost exceeded fixed cost but was less than marginal revenue. D. marginal cost was above average cost but greater than marginal revenue.
Government regulation of the prices and entry conditions in an industry is an example of
a. safety regulation b. economic regulation c. Herfindahl regulation d. antitrust regulation e. Social Security legislation