Monetarists emphasize
a. crowding-out but not the liquidity trap.
b. crowding-out and the liquidity trap.
c. the liquidity trap but not crowding-out.
d. neither crowding-out nor the liquidity trap.
A
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When marginal private cost is equal to marginal social cost,
A. the activity in question generates no positive externality. B. the activity in question generates no negative externality. C. all positive externalities have been internalized. D. all negative externalities have been internalized. E. b or d
Refer to the payoff matrix below. If Healthy Snacks is known for consistently bringing new products to the market and this is the focal point, what is the equilibrium of the game using the focal point criterion?
Healthy Snacks and Best Treats are two firms competing in the health food snacks market. Both are considering introducing a new health food snack made purely of dried power fruits. The payoff matrix shows their net economic profit in millions for the different strategies.
A) Best Treats Introduce and Healthy Snacks Introduce.
B) Best Treats Do Not Introduce and Healthy Snacks Do Not Introduce.
C) Best Treats Do Not Introduce and Healthy Snacks Introduce.
D) Best Treats Introduce and Healthy Snacks Do Not Introduce.
If price is between AVC and ATC, the best and most practical thing for a perfectly competitive firm to do is
A) raise prices. B) lower prices to gain revenue from extra volume. C) shut down immediately, but not liquidate the business. D) shut down immediately and liquidate the business. E) continue operating, but plan to go out of business.
According to the law of demand:
A. Price and quantity demanded are inversely related. B. Price is constant along a particular demand curve. C. The demand curve will shift rightward as price increases. D. Businesses will produce more as price increases.