Which of the following occur in the real world?
a. Neither market failures nor government failures
b. Government failures but not market failures
c. Market failures but not government failures
d. Both market failures and government failures
Answer: d. Both market failures and government failures
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The period of time between when monetary policy is enacted and when it actually begins to affect the economy is called the
A) recognition lag. B) implementation lag. C) impact lag. D) liquidity lag.
A patent is an example of
A) how ownership of a key input creates a barrier to entry. B) a government-imposed barrier to entry. C) how market failure can lead to oligopoly. D) occupational licensing.
Output (Bushels of Barley)Marginal Cost(Dollars)10 bushels$0.3020 bushels$0.6030 bushels$0.9040 bushels$1.20 Refer to Table 5.1, which gives Farmer McColl's marginal cost function for barley. If Farmer McColl is currently producing 20 bushels of barley, which of the following is the market price for a bushel of barley?
A. $1.20 B. $12.00 C. $0.60 D. $6.00
For this question, assume that one-year and two-year bonds have the same risk; therefore, you can ignore risk here. Assuming that there is arbitrage between one-year bonds and two-year bonds, we know that the expected rate of return on two-year bonds
A) will equal the expected rate of return from holding a one-year bond for one year. B) will equal the expected rate of return from holding a one-year bond for two years. C) will be larger than the expected rate of return from holding a one-year bond for one year. D) will be smaller than the expected rate of return from holding a one-year bond for one year. E) will be exactly half the rate of return on one-year bonds.