When all prices are set equal to marginal costs,
A. consumers buy more than they should.
B. consumers will get less utility.
C. markets are giving correct signals to consumers.
D. producers make excessive profits.
Answer: C
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High inflation can spiral out of control when
A) expected inflation increases nominal interest rates, causing the Fed to buy bonds, increasing the money supply and further increasing inflation. B) expected inflation decreases nominal interest rates, causing the Fed to buy bonds, increasing the money supply and further increasing inflation. C) expected inflation increases nominal interest rates, causing the Fed to sell bonds, increasing the money supply and further increasing inflation. D) expected inflation decreases nominal interest rates, causing the Fed to sell bonds, increasing the money supply and further increasing inflation.
When there is a tendency for a particular product to fall out favor with additional consumers because other consumers have chosen not to purchase the product
A) negative market feedback occurs. B) positive market feedback occurs. C) the tit-for-tat strategy will begin. D) the network effect will increase.
The Big Mac Index suggests that exchange rates should leave Big Mac hamburgers costing the same in the United States as abroad.
a. true b. false
This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope.
From the graph, one can infer that:
A. the marginal cost of picking up the 10th bag of litter exceed the marginal benefit. B. the marginal benefit of picking up the 20th bag of litter exceed the marginal cost. C. the total benefit of having 30 bags removed is zero. D. the marginal benefit of picking up the 10th bag of litter exceed the marginal cost.