Suppose you can fly from your home city to New York but only one airline provides the service. This market would be described by
A. monopoly.
B. healthy competition.
C. oligopoly.
D. perfect competition.
Answer: A
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If an economy experiences an increase in its capital stock, everything else constant, then its production possibilities frontier (PPF) will
A) expand outward but keep its original shape. B) expand outward largely in the direction of the labor intensive good. C) expand outward largely in the direction of the capital intensive good. D) not expand until the labor force grows.
When network effects are important, then an industry can experience
A) positive market feedback. B) prince-leadership. C) a zero-sum game. D) a vertical merger.
A Lorenz curve that represents an unequal income distribution is
A) a straight line starting at the origin. B) a straight line starting at 100% C) a bowed curved. D) a line that has a kink in the middle of it.
Related to the Economics in Practice on p. 550: In the simple "Keynesian" view, the economy has a
A. set price level. B. clearly defined capacity. C. horizontal aggregate demand curve. D. downward sloping aggregate supply curve.