A pure monopoly most likely results in productive inefficiency because at the profit-maximizing level of output ________.
A. MC is not at its minimum level
B. P is greater than AVC
C. ATC is not at its minimum level
D. MR is not zero
Answer: C
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The short-run effect of an increase in the supply of money is
A) an increase in the price level, a decrease in real Gross Domestic Product (GDP), but an increase in nominal national income. B) an increase in the price level but not in real Gross Domestic Product (GDP). C) an increase in both real Gross Domestic Product (GDP) and the price level. D) an increase in real Gross Domestic Product (GDP) but not in the price level.
The speed at which abnormal net income falls to zero is called
A) the balance sheet exposure. B) the depreciation rate. C) the decay rate. D) the exchange rate.
Goods whose production is associated with positive externalities are
a. under-priced and over-provided b. under-priced and under-provided c. over-priced and under-provided d. over-priced and over-provided e. not provided by private markets
An important effect of fractional reserve banking is that bankers have
A. little control over total reserves. B. total control over the amount of lending in the economy. C. no control over the amount of reserves in the banking system. D. some discretion over the money supply.