Which of the following is not considered a legitimate concern of a large public debt?
A. Bankruptcy of the federal government.
B. Disincentives created by higher taxes.
C. Crowding-out of private investment.
D. Increased income inequality.
A. Bankruptcy of the federal government.
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McDonald's and its major competitors compete based:
A) only on the price. B) only on the basis of product characteristics. C) on both the price and product characteristics. D) none of the above because the fast-food industry is perfectly competitive.
A monopolist claims his profit-maximizing markup factor is 10. What is the price elasticity of demand for the firm's product?
A. ?2.0 B. ?2.5 C. ?1.5 D. None of the answers are correct.
To be accepted as money, an item must perform all of the following functions EXCEPT
A. be easily reproduced. B. be a medium of exchange. C. serve as a store of value. D. serve as a standard of deferred payment.
Voluntary trade promotes economic progress because
A) it discourages trade based on the comparative advantage of suppliers. B) This is a trick question; voluntary exchange does not promote economic progress. C) it moves goods, services and resources from people who value them less to individuals who value them more. D) it discourages businesses from seeking lower per-unit costs through adoption of mass production methods.