Refer to Figure 10.8. Other things equal, an increase in the price level would best be represented by
A) a movement from point A to point C.
B) a movement from point A to point D.
C) a shift from LM1 to LM2.
D) a shift from LM2 to LM1.
D
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Consider a situation in which a utility company emits high levels of sulfur dioxide and the company is not liable for the damages its pollution causes
According to the Coase theorem, government action is ________ to achieve an ________ amount of pollution. A) not necessary; efficient B) necessary; efficient C) necessary; equitable D) not necessary; equitable
If assets are relatively _____, and uncertainty is _____, transactions usually take place in markets
a. specific; quite low b. nonspecific; quite low c. specific; quite high d. nonspecific; quite high
The principal benefit of unemployment insurance is that it
a. reduces the occurrence of unemployment in the economy. b. replaces income lost due to unemployment. c. increases labor force participation. d. helps reduce the period of unemployment.
An oligopoly would tend to restrict output and drive up price if
a. barriers to entering the industry are negligible. b. firms engage in informative advertising. c. firms produce a standardized product. d. firms collude and behave like a monopoly.