Crest Toothpaste offers new whitening toothpaste one year, a new gel swirl design the next year, and an improved cleaning formula the year after. Crest Toothpaste does this because it is
A) a monopoly trying to decrease its costs.
B) a perfectly competitive firm trying to increase its price.
C) a monopolistically competitive firm trying to maintain its economic profit.
D) driving its competitors out of business.
E) a perfectly competitive firm trying to increase its costs so it can increase its price.
C
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Inflation can occur under conditions of full employment
A) only if the central bank continues to inject money into the economy and the agents' expectations of inflation are supported by the bank's activities. B) only if the central bank continues to inject money into the economy. C) only if the central bank continues to withdraw money from the economy. D) only if the central bank continues to inject money into the economy and all agents expect that inflation will not occur. E) only if the central bank fails to inject money into the economy.
If the economy were in the Classical range of the aggregate supply curve, government policies and central bank actions should focus primarily on:
a. reducing unemployment. b. increasing government spending to boost demand. c. keeping inflation reasonably low. d. preventing deflation. e. All of the above.
Suppose the marginal physical product of labor at a shoe string factory is 1,500 shoestrings per hour at 80 hours, 1,200 per hour shoestrings at 90 hours, 800 shoestrings per at 100 hours, and 300 shoestrings per hour at 110 hours. If a shoestring maker’s wages are $60 per hour and each string sells for $0.05. What is the optimal use of labor for making shoestrings?
A. 80 hours B. 90 hours C. 100 hours D. 110 hours
Two common economic problems that may arise from asymmetric information are:
A. moral hazard and adverse decisions. B. moral consequence and adverse decisions. C. moral consequence and adverse selection. D. moral hazard and adverse selection.