The Time-for-a-Change wristwatch company holds a patent on holographic wristwatches. The company can earn a profit on the sale of holographic wristwatches
A. only in the long run because government regulations prevent monopolists from earning profits in the short run.
B. in the long run but not the short run because the monopolist will face competition in the short run.
C. in the long run because entry into the industry by new firms is blocked until the patent expires.
D. in the short run but not in the long run because new firms will enter the industry in the long run.
Answer: C
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Arguments for the balanced budget amendment include all of the following EXCEPT
A) a balanced budget amendment would limit Congress from using fiscal policy during a recession. B) a balanced budget amendment would increase capital formation. C) a balanced budget amendment would reduce the taxation burden on future generations. D) a balanced budget amendment would exert fiscal discipline on the federal government.
Describe the holdout problem with emphasis on how it might lead to resource being allocated inefficiently. Give three private ways to possibly overcome the holdout problem
What will be an ideal response?
Pure economic rent is a payment to a resource that
A) has a high opportunity cost. B) has a perfectly inelastic supply. C) has a negative opportunity cost. D) has a perfectly elastic demand.
If purchasing-power parity holds, when a country's central bank decreases the money supply, its
a. price level rises and its currency appreciates relative to other currencies in the world. b. price level falls and its currency appreciates relative to other currencies in the world. c. price level rises and its currency depreciates relative to other currencies in the world. d. price level falls and its currency depreciates relative to other currencies in the world.