The figure above shows a nation's production possibilities frontier. In the figure, point B shows
A) an unattainable point.
B) an attainable point.
C) a point with a free lunch.
D) a point with no trade off.
E) a point at which there are unemployed resources.
A
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Because borrowers, once they have a loan, are more likely to invest in high-risk investment projects, banks face the
A) adverse selection problem. B) lemon problem. C) adverse credit risk problem. D) moral hazard problem.
Contestability of markets depends crucially upon
a. the nationalization of these markets b. large economies of scale c. strong brand loyalty for existing firms d. the presence of natural monopoly e. the ability of new firms to enter the market
What is the shape of the monopolist's marginal revenue curve?
a. a downward-sloping line that is identical to the demand curve b. a downward-sloping line that lies below the demand curve c. a horizontal line that is identical to the demand curve d. a horizontal line that lies below the demand curve
Labor unions
a. prefer to operate in states with right-to-work laws. b. are similar to cartels. c. play a larger role in the current U.S. economy than in European countries such as Norway and Sweden. d. attract a membership of about 25 percent of current U.S. workers.