What famous economist said that the market economy seemed to be controlled by an invisible hand?
a. Alfred Marshall. b. Adam Smith.
c. Karl Marx. d. Robert L. Heilbroner.
b
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If 2014 is the base year, what is the price index for a market basket of goods for 2015 in the above table?
A) 97.3 B) 102.8 C) 128.0 D) Zero, since the price of CDs fell and the price of gasoline increased
If unemployment is below the natural rate, GDP is below potential output
a. True b. False
Following mergers that raised the market shares of two airlines to 79 and 82 percent, respectively, of traffic in their hub cities, prices of service rose and the quantities of service fell, even though in most other markets, prices fell and quantities increased. The result suggests thatÂ
A. these markets were contestable. B. there was evidence of market power. C. oligopoly firms bought out their competitors. D. the market had no barriers to entry.
Oftentimes, the socially optimal quantity for a product that imposes external costs on the society is not zero, but something greater than zero. This is because completely eliminating the externality would involve:
A. A much greater marginal benefit than marginal cost B. A much greater marginal cost than marginal benefit C. Having shortages in the market D. Having surpluses in the market