In equilibrium, which of the following conditions is common to both unregulated monopoly and pure competition?
A) P = MR
B) AR = ATC
C) MR = MC
D) MC = P
Answer: C
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In what way do policy makers have to face a trade-off between inflation and unemployment?
a. The cost of reducing inflation by restrictive fiscal and monetary policies is a temporary increase in unemployment. b. The cost of reducing inflation by restrictive fiscal and monetary policies is a permanent increase in unemployment. c. The cost of reducing unemployment by expansionary fiscal and monetary policies is virtually nonexistent. d. The cost of reducing unemployment by expansionary fiscal and monetary policies involves higher inflation during recessions.
If the long-run equilibrium of an economy is disrupted by an unexpected shift to a more expansionary monetary policy, the policy shift will
a. reduce aggregate demand and real output in the short run. b. lead to a higher rate of unemployment in the short run. c. stimulate real output in the short run, but in the long run, its primary impact will be on the general level of prices. d. lead to an increase in the general level of prices in the short run, but in the long run, its primary impact will be an expansion in real output.
Public Broadcasting, in its fund drives, often appeals to viewers by saying, "without you, there will be no Big Bird." This is likely to ________ the free-rider problem and lead to a ________ level of contribution to the public good.
A. increase; smaller B. increase; larger C. reduce; smaller D. reduce; larger
The owners of a ________ have a separate legal distinction from the business
A) partnership B) sole proprietorship C) corporation D) All of the above are correct.