When consumers have asymmetric information and when search costs and the number of firms are large, a single-price equilibrium in a competitive market
A) is impossible.
B) occurs when price equals average cost.
C) occurs when price equals marginal cost plus the search cost.
D) occurs when the price is the price a monopoly would set.
D
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The same year that Derek Jeter, one-time shortstop for the New York Yankees, received an annual salary of $23.2 million, the president of the United States received an annual salary of $400,000. If the president of the United States actually contributed more to society than Derek Jeter, we can conclude that:
A. there is never a relationship between marginal revenue product and pay. B. the salary differences are based entirely on marginal revenue products. C. factors other than marginal revenue product probably explain the salary differences. D. the markets for their respective services are perfectly competitive.
For policymakers, the problem with a recessionary gap is ________ and the problem with an expansionary gap is ________.
A. an increase in cyclical unemployment; an increase in structural unemployment B. an increase in structural unemployment; an increase in cyclical unemployment C. wasted resources; a tendency for inflation to increase D. a tendency for inflation to increase; wasted resources
Discuss the types of policies that could be implemented to reduce European unemployment
What will be an ideal response?
The crowding-out effect of expansionary fiscal policy suggests that:
A. government spending increases at the expense of private investment. B. imports replace domestic production. C. private investment increases at the expense of government spending. D. saving increases at the expense of investment.