Economic analysis suggests that gains from specialization and exchange
a. will not be realized unless a central planning authority requires that all goods be produced by the low opportunity cost supplier.
b. will be realized if individuals are allowed to pursue goals that are in their own self-interest.
c. will not be realized unless business firms employ economists when making decisions about the proper combination of resources to utilize in the production process.
d. will be realized if individuals place the public interest above the pursuit of their own self-interest.
B
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A purely self-interested diner is more likely to tip:
A. only when dining in a very up-scale restaurant. B. only when dining in a restaurant at which he often eats. C. always, to assure good service. D. whenever he can afford to.
Use the following graph to answer the next question.
If the industry were a pure monopoly, the profit-maximizing price would be ________.
A. $8 B. $14 C. greater than $16 D. $16
The long-run Phillips curve indicates that
A) potential GDP can never be achieved. B) there is no way to control the inflation rate in the long run. C) any inflation rate is possible at the natural unemployment rate. D) any unemployment rate is possible at the natural inflation rate. E) there is a tradeoff between the inflation rate and the unemployment rate in the long-run.
In a binding situation, a positive cost shock will cause ________ in output and ________ in the price level.
A. no change; no change B. a decrease; no change C. no change; an increase D. a decrease; an increase