What is a likely explanation for why the budget of a government agency might increase beyond its optimal size?
A. The paradox of voting
B. The influence of the median voter
C. The power of special-interest groups
D. The allocative efficiency of government
C. The power of special-interest groups
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The birth of the Euro
A) resulted in fixed exchange rates between all EMU member countries. B) resulted in flexible exchange rates between all EMU member countries. C) resulted in crawling-peg exchange rates between all EMU member countries. D) resulted in non currency board exchange rates between all EMU member countries. E) resulted in floating exchange rates between all EMU member countries.
To maximize profit, a perfectly competitive firm that decides not to shut down will choose the rate of output at which
a. price is highest b. price minus average total cost is maximized c. price equals marginal cost d. total revenue is maximized e. average total cost is minimized
Assume that many households and businesses reduce their spending only because they expect other households and consumers to reduce their spending. Also suppose that all households and consumers would be better off if they did not reduce their spending
This situation best describes the: A. real-business-cycle theory. B. rational expectations theory. C. concept of coordination failures. D. adaptive expectations theory.
A nondiscriminating pure monopoly must decrease the price on all units of a product to sell more units. This explains why ________.
A. total revenues are greater than total costs at the profit maximizing level of output B. a pure monopoly's marginal revenue curve is below its demand curve C. there are barriers to entry in pure monopoly D. a pure monopoly has a perfectly elastic demand curve