Suppose the central bank reduces the money supply. This monetary contraction will always cause a greater reduction in output when it is accompanied by
A) an increase in expected future taxes.
B) an increase in expected future interest rates.
C) a reduction in expected future output.
D) all of the above
E) none of the above
D
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An incumbent announces it will significantly increase output in the next period, but only has contracts for the amount produced this period. The announcement is a
A) credible threat. B) non-credible threat. C) commitment. D) mixed strategy.
Refer to Scenario 17.4. If the flood control system were in place, the firm could insure against a flood for an annual premium of
A) $5,000. B) $10,000. C) $100,000. D) $200,000. E) $1,000,000.
A firm's opportunity costs of using resources provided by the firm's owners are called
a. sunk costs b. fixed costs c. explicit costs d. implicit costs e. entrepreneurial costs
Which of the following is generally true of a monopolistic competitor operating in the long run?
a. price greater than minimum average total cost b. price equal to marginal revenue c. price equal to marginal cost d. positive economic profits