Sometimes banks tend to invest in risky stocks because the deposits of their customers are insured by the Federal Deposit Insurance Committee. This behavior is an example of ________
A) adverse selection
B) moral hazard
C) the paradox of thrift
D) the free-rider problem
B
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Figure 10-4
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Figure 10-4 shows the industry’s supply and demand curves in panel (1) and the cost curves of a firm in the industry in panel (2). At S2, the firm is
A. going to shut down. B. incurring losses. C. earning zero economic profits. D. earning economic profit greater than zero.
The idea behind the Phillips curve is that ________
A) tight labor markets lead to inflationary pressures B) when the unemployment rate is low, wages will increase C) when firms raise wages to attract new workers, prices will also increase D) all of the above E) none of the above
Since a monopolistic competitor produces a product with many close substitutes, but none exactly like it. As a result, the firm:
a. has no market power. b. faces a highly inelastic demand curve. c. has unlimited market power. d. has some degree of market power.
Innovation is
A. always financed by the government. B. an invention financed by the sale of stock certificates. C. an invention financed by the sale of bonds. D. the transformation of an invention into something useful.