Hotels in New York City frequently experience an average vacancy rate of about 20 percent (i.e., on an average night, 80 percent of the hotel rooms are full). This kind of excess capacity is indicative of what kind of market?
a. monopoly
b. perfect competition
c. monopolistic competition
d. oligopoly
c
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Two reasons savers keep deposits at banks are to:
A. lower interest rates and to increase the money supply. B. equalize loan supply and demand and to earn interest. C. earn a return on their savings and to facilitate making payments. D. secure mortgages and to purchase stocks.
Firms maximize profits when marginal revenue equals marginal cost
Indicate whether the statement is true or false
The relative cost of achieving a fixed standard of living in different situations is called:
A. a cost of living index. B. compensating variation. C. real income. D. consumer surplus.