If an asset can be disposed of without much risk of losing its nominal value, it is said to be
A. worthless.
B. fiduciary.
C. valuable.
D. liquid.
Answer: D
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If government forced a firm to charge a price equal to marginal cost in a situation where there are scale economies,
a. new firms would enter the industry. b. the firm would be forced to go bankrupt. c. positive economic profit would grow even larger. d. marginal cost would exceed average cost.
Use the following graph, which shows the aggregate demand and aggregate supply schedule for a hypothetical economy, to answer the next question.Real Domestic Output Demanded (in billions)Price Level (index value)Real Domestic Output Supplied (in billions)$500350$3,5001,0003003,0001,5002502,5002,0002002,0002,5001501,5003,0001001,000If the quantity of real domestic output demanded decreased by $500 and the quantity of real domestic output supplied increased by $500 at each price level, the new equilibrium price level and quantity of real domestic output would be ________.
A. 250 and $2,000 B. 200 and $2,000 C. 150 and $1,500 D. 150 and $2,000
Which of the following is a source of market failure?
A) unforeseen circumstances which leads to the bankruptcy of many firms B) a lack of government intervention in a market C) incomplete property rights or inability to enforce property rights D) an inequitable income distribution
Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch.
The equilibrium to the game results in ________ for Amy and Tracy relative to what they could get if they could solve their ________.
A. lower payoffs; commitment problem B. lower payoffs; prisoner's dilemma C. higher payoffs; commitment problem D. lower payoffs; credible threat