If utility is not maximized, then:
A. some change in consumption will increase satisfaction.
B. no change in consumption will increase utility.
C. only a change in income will increase utility.
D. only a change in price will increase utility.
Answer: A
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The costs of inflation to households and firms due to holding less money and making more frequent trips to the bank are known as
A) seigniorage. B) menu costs. C) velocity costs. D) shoe-leather costs.
You put money in the bank. The increase in the dollar value of your savings
a. and the change in the number of goods you can buy with your savings are both nominal variables. b. and the change in the number of goods you can buy with your savings are both real variables. c. is a nominal variable, but the change in the number of goods you can buy with your savings is a real variable. d. is a real variable, but the change in the number of goods you buy with your savings is a nominal variable.
The greater are the barriers to entry into an industry
A. the more elastic will be the demand curves for existing firms. B. the more likely that existing firms will enjoy large profits in the long run. C. the lower will be short-run profits. D. the lower will be the average cost curves of existing firms.
Which of the following is not a viewpoint of the self-interest theory of government?
A. Politicians and bureaucrats pursue their own interests rather than public interests. B. Politicians may have an incentive to gain renown by pursuing a public program the cost of which exceeds its benefits. C. Limitations on taxes and spending are considered as safeguards against the selfish behavior of government officials. D. Government officials are assumed to align their interests with public interests.