What is the simple interest of a loan for $1,000 with 5 percent interest after 3 years?
(A) $150
(B) $1,150
(C) $50
(D) $1,050
Ans: (A) $150
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According to the textbook, government price controls fail because:
A. legislation cannot alter basic economic incentives. B. firms ignore the price controls. C. they are not enforced by government. D. bureaucrats lack accurate market data.
The more certain private property rights are
A) the less people need to invest in education or human capital development. B) the more an economy must grow to maintain a certain living standard. C) the less entrepreneurship there will be. D) the more capital accumulation there will be.
The success of a predatory pricing strategy in an oligopolistic market depends on all of the following except:
A) the number of firms operating in the industry prior to enactment of the policy. B) how far the predatory price is below cost. C) the period of time for which the predatory price is in effect. D) the length of time over which recoupment of profits occurs.
Which of the following offers the best example of the special interest theory of regulation?
a. The deregulation of the trucking industry. b. Consumer groups lobbying the Federal Energy Regulatory Commission to create a competitive market for natural gas. c. A state public utility commission regulating a natural monopoly to best serve the public interest by maintaining low prices and sustaining the firm at zero economic profit. d. The Civil Aeronautics Board (CAB) protecting existing airlines from competition by rejecting every single application for new entry into interstate airline markets over the life of the CAB.