An oligopoly with a dominant price leader will produce an output level that is ________ than the output level that would prevail if the industry were competitive and sells it at a price that is ________ than the price that would prevail if the industry were competitive.
A. lower; lower
B. lower; higher
C. higher; higher
D. higher; lower
Answer: B
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If the Federal Reserve wanted to change the money supply in the economy, it would be least likely to
A) change the federal funds rate. B) sell bonds on the open market. C) change the level of reserves required to be held by banks. D) buy bonds on the open market.
If the economy is at point 1 in Figure 13.1 and the central bank issues a credible statement that it can and will cause inflation to rise, what happens next?
A) the economy moves to point 2 B) the economy remains at point 1 C) the economy moves to the left along the AS curve D) the AS curve shifts down, causing both output and inflation to decline E) the AS curve shifts up, causing both output and inflation to rise
Among the people who are characterized below, who has the highest opportunity cost of leisure?
a. an attorney who earns $200 per hour and who plays golf during her leisure time b. a medical doctor who earns $210 per hour and who sleeps during his leisure time c. a retail clerk who earns $15 per hour and who watches TV during her leisure time d. a waiter who earns $12 per hour and who reads poetry during his leisure time
Both inflation and deflation refer to a change in ______.
a. the price level b. the minimum wage c. the efficiency wage d. the equilibrium wage