Protecting intellectual property rights:
A. encourages research and development.
B. will increase total surplus for society.
C. gives no incentive to innovate.
D. only benefits producers in society.
Answer: A
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Refer to the following graph. In order to get an expansion in real income and a lower price level then
a. aggregate demand would have to increase.
b. aggregate demand would have to decrease.
c. aggregate supply would have to increase.
d. aggregate supply would have to decrease.
Why might the Fed decide to monetize the deficit?
a. to keep inflation low b. to reduce the structural deficit c. to reduce the budget deficit d. to keep interest rates low
When there is an excess supply of money,
a. people will try to get rid of money causing interest rates to rise. Investment increases. b. people will try to get rid of money causing interest rates to fall. Investment decreases. c. people will try to get rid of money causing interest rates to fall. Investment increases. d. people will try to get rid of money causing interest rates to rise. Investment decreases.
The Taste Freeze Ice Cream Company is a perfectly competitive firm producing where MR = MC. The current market price of an ice cream sandwich is $5.00. Taste Freeze sells 200 ice cream sandwiches. Its AVC is $4.00 and its AFC is $3.00. What should Taste Freeze do?
A. Continue to produce because price exceeds AVC. B. Shut down and produce zero sandwiches because price is less than ATC. C. Increase production so that AFC will decrease. D. Decrease production so that AVC will decrease.