Which of the following would unambiguously generate deflation?
A. an increase in aggregate demand accompanied by an increase in aggregate supply
B. a decrease in aggregate demand accompanied by an increase in aggregate supply
C. a decrease in aggregate demand accompanied by a decrease in aggregate supply
D. an increase in aggregate demand accompanied by a decrease in aggregate supply
Answer: B
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Because of the free-rider problem, ________
A) there is an efficient allocation of resources for common resources B) private provision leads to the production of more than the efficient quantity of a public good C) private provision leads to the production of less than the efficient quantity of a public good D) the public uses too little of a common resource
Jonathan Gold Miners & Co operates in a perfectly competitive market. In recent years, it has benefitted from a record rise in gold prices as the price of its output is highly influenced by market speculation. It buys its inputs from perfectly competitive resource markets. If it wants to take advantage of the rise in gold prices, it should: a. increase its production and accept the market price
for its physical capital inputs. b. increase its price to a level where it is higher than its marginal revenue. c. reduce its production to encourage speculators to drive gold prices higher. d. negotiate to reduce the wage rate of its labor inputs to maximize profits.
The Federal Reserve was created in
A) 1893. B) 1913. C) 1921. D) 1933.
Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. Which of the following best represents Alice's inverse residual demand function?
A. P(QA) = (100 - 0.005QA) - 0.005QK B. P(QA) = (100 - 0.005QK) - 0.005QA C. P(QA) = (200 - 0.005QA) - 0.005QK D. P(QA) = (200 - 0.005QA) - 0.005QA