Refer to the graph shown. If the government's goal is to eliminate the welfare costs of monopoly, it will:
A. establish a price floor at P1.
B. establish a price ceiling at P3.
C. not attempt to control price.
D. establish a price ceiling at P2.
Answer: D
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The figure above shows Kaley's marginal benefit from swimming with manatees and Scott's marginal cost of providing manatee swimming tours. At 1 manatee swim per week, Kaley's marginal benefit is ________ and Scott's marginal cost is ________
A) $40; $10 B) $40; $40 C) $90; $50 D) None of the above answers is correct.
The production possibilities frontier separates ________
A) the goods and services that people want from those that they do not want B) the types of goods that can be attained from those that can't be attained C) the quantities of goods and services that can be produced from those that cannot be produced D) the combinations of goods that people value and those that they don't
When the Fed unexpectedly increases the money supply, it will cause an increase in aggregate demand because: a. real interest rates will fall, stimulating business investment and consumer purchases
b. the dollar will depreciate on the foreign exchange market, leading to an increase in net exports. c. lower interest rates will tend to increase asset prices, which increases wealth and thereby stimulates current consumption. d. of all the above reasons.
Which of the following examples best illustrates a negative network externality?
a. Jamal goes to the theme park on weekdays to avoid the crowds. b. Jamal buys his plane ticket on sale to avoid an expected rate increase. c. Jamal goes to a movie instead of a concert because concert ticket prices increase. d. Jamal buys a season pass to the theme park to save money.