In many large U.S. cities, taxicab companies operate as near monopolies because of:
A. Patents
B. Licenses
C. Economies of scale
D. Strategic pricing
B. Licenses
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When the cost of the CPI market basket increases from one year to the next, we know that
A) on the average, current prices are less than past year prices. B) the quantities of the goods and services contained in the CPI market basket have increased on the average. C) the prices of the goods and services contained in the CPI market basket have increased on the average. D) on the average, current prices are below base year prices. E) either the quantities of the goods and services contained in the CPI market basket have increased on the average and/or the prices of the goods and services contained in the CPI market basket have increased on the average.
Which of the following would most likely increase the demand for peanut butter?
a. a decrease in the price of jelly, a good that is often used with peanut butter b. the discovery that excessive consumption of peanut butter is harmful to one's health c. crop failures that raise the price of peanuts d. the invention of a new product that consumers think is a good substitute for peanut butter
If Al has an absolute advantage over Beth in preparing meals, then:
A. Al's opportunity cost of preparing a meal is lower than is Beth's. B. it takes Al more time to prepare a meal than Beth. C. Al can prepare more meals in a given time period than Beth. D. the problem of scarcity applies to Beth but not to Al.
Which of the following supports the argument for hands-on policy?
A. The failure of discretionary policy. B. The theory of rational expectations. C. Greater stability of the economy in the last 40 years. D. The existence of the four obstacles to policy success.