What does the Herfindahl-Hirschman Index value near 10,000 imply about the market?
a. Pure monopoly
b. Perfect competition
c. Monopolistic competition
d. Oligopoly
a
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According to the rational expectations theory,
a. on average people have very little idea of what to expect from government policy makers. b. people form expectations by focusing only on the private sector. c. people do not consider likely government policies when forming expectations. d. people form expectations, in part, by considering the probable future effects of changes in government policy.
Gasoline prices are rising because OPEC has cut the supply of oil they are willing to sell in the world oil market. You hear someone in a restaurant say that the government should put a ceiling on the price of gasoline to protect citizens from price gouging. Discuss the pros and cons of a price ceiling on gasoline.
What will be an ideal response?
To conduct a partial equilibrium analysis of a change in consumer preferences toward coffee and away from tea, you must consider
A. changes in the amount of resources allocated to the production of coffee. B. changes in the price of resources allocated to the production of coffee. C. changes in the equilibrium price and quantity of coffee. D. all of the above
How does an increase in the price level affect the aggregate quantity of goods and services demanded?
What will be an ideal response?