A restrictive monetary policy, all else equal, will:
A) depreciate the domestic currency.
B) appreciate the domestic currency.
C) all of the above.
D) none of the above.
B
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We know that a perfectly competitive firm is a price taker because
A) its MC curve slopes upward. B) its ATC curve is U-shaped. C) its demand curve is horizontal. D) MC and ATC are equal at the profit-maximizing amount of output. E) it has no supply curve.
Fixing up old houses requires plumbing and carpentry. Jack (who is a jack of all trades but is a master of none) is a decent carpenter and a decent plumber, but is not particularly good at either
He can fix up two houses in a year if he does all of the carpentry and plumbing himself. His wage is $50,000 per year. a. What is Jack's average total cost of fixing up two old houses? b. George is an excellent plumber and Harriet is an excellent carpenter. George can do all of the plumbing and Harriet can do all of the carpentry to fix up five houses per year. Each earns a wage of $50,000 per year. If George and Harriet work together and fix up five old houses each year, what is their average cost? c. What does this problem tell you about one of the sources of economies of scale?
Which of the following is not an advantage of risk pooling?
A) By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection. B) It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals. C) Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services. D) It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy.
The price of pie increases. Some people who purchased pie before the price increase no longer purchase pie. This is
A) a positive externality. B) a negative externality. C) a positive externality for some consumers and a negative externality for others. D) not an externality.