According to the quantity theory, inflation is ultimately controlled by
a. private firms who set prices.
b. the monetary authorities who control the money supply.
c. those who control output.
d. the price of oil.
B
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What most accurately describes the trend in inter-city prices between 1815-1860?
a. Prices of goods in different eastern cities diverged. b. The prices of goods in the Midwest converged towards the prices of goods in the east. c. Prices of goods in the Midwest decreased relative to the prices of goods in the east.
In a market where firms are able to reduce their private costs by shifting costs onto others, which of the following will not happen? a. Inefficiencies will occur
b. Negative externalities will be observed. c. The market prices of products produced by firms will be too low relative to the social optimum. d. Output of the good being produced will be too low.
Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market
a. decreases. b. is unchanged. c. increases. d. may increase, decrease, or remain unchanged.
Which of the following statements is TRUE?
A) As more of a good is consumed, its total utility increases, unless the good is subject to diminishing marginal utility. B) As more of a good is consumed, its total utility increases, even if the good is subject to diminishing marginal utility. C) No two people have identical utility functions, just as no two people have identical fingerprints. D) Both A and C above.