If entry barriers into a monopolized market are kept low,
A. Government failure exists.
B. A market is contestable.
C. Market power increases.
D. A duopoly will be created.
Answer: B
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We can be sure that the equilibrium price will fall when: a. supply and demand both increase
b. supply and demand both decrease. c. supply increases and demand decreases. d. supply decreases and demand increases.
Which of the following most accurately states the economic significance of exchange?
a. Physical goods have value because they exist; exchange can neither increase nor decrease their value. b. Production of physical goods creates value; exchange merely redistributes this value. c. Exchange creates value by moving goods from parties who value them less to parties who value them more. d. Exchange reduces value since it consumes resources without adding to the physical supply of goods.
John earned a PhD in biomedical engineering, and works full-time as a faculty member at the local university. He also does some private consulting work on the side. He would like to give up teaching and do consulting full-time, but he fears there isn't enough demand for it. The best way to describe John is to say he is:
A. a discouraged worker. B. overemployed. C. underemployed. D. employed.
When the Fed promised to hold the Fed funds rate close to zero until the end of 2014, it was:
A. carrying out what is known as credit easing. B. following a precommitment policy. C. following a policy that was recommended by Congress. D. carrying out what's known as operation twist.