Rent-seeking behavior creates:
A. waste, but is efficient.
B. waste and inefficiency.
C. inefficiencies, but not waste.
D. efficiency without waste.
Answer: B
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The difference between a firms' profit-maximizing quantity and the quantity that minimizes average cost is called excess capacity
Indicate whether the statement is true or false
The circular flow model illustrates
A. the interdependence of businesses and consumers. B. the importance of having a central plan for the economy. C. how natural and other resources are created. D. how money is created by the banking system.
Refer to Figure 16.1. If a firm expects that consumer preference for its product will increase in the future, this is best represented by a movement from
A) point A to point C. B) point B to point A. C) point A to point B. D) point C to point A.
When the Fed sells Treasury Bonds on the open market, it will tend to
a. decrease the money supply and raise interest rates. b. decrease the money supply and lower interest rates. c. increase the money supply and raise interest rates. d. increase the money supply and lower interest rates.