Refer to the scenario above. John should submit a bid of ________
A) $400
B) $300
C) $100
D) $200
B
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Perfect competition ________ a fair outcome ________
A) achieves; because both the fair rules and fair results conditions are met B) achieves; because total surplus is maximized C) does not achieve; because entrepreneurs only earn a normal profit D) does not achieve; because firms must be price takers E) may achieve; if average total costs are minimized
Assume that a security has two possible outcomes. There is a 50 percent chance that the yield will equal 12 percent and a 50 percent chance that the yield will equal 4 percent. The expected yield for this security is
A) 16 percent. B) 12 percent. C) 8 percent. D) 4 percent.
To correct for positive externalities the government
A) should allow the price system to do the correction. B) can impose a tax. C) can give a subsidy. D) should create a public good.
Within the framework of the AS/AD model, which of the following is a true statement regarding short-run aggregate supply?
a. An increase in prices temporarily improves profit margins because important components of costs are fixed in the short run. b. An increase in prices leads to higher interest rates, which temporarily improves profit margins. c. An increase in prices leads to an expansion in the money supply, which stimulates additional output. d. An increase in prices increases real wage rates and thereby expands the size of the economy's resource base.