In terms of market failure, what is meant by monopoly?
a. The government holds the power to control prices, lower unemployment, or reduce inflation.
b. Most of the resources in an economy are controlled by CEOs and other business executives.
c. Technological change spurs significant growth in one economic sector while leaving others unchanged.
d. One seller dominates a market and excludes others from participating in mutually beneficial exchange.
d. One seller dominates a market and excludes others from participating in mutually beneficial exchange.
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A wealth tax can be justified because it
A. helps to correct certain (inevitable) problems that arise in the administration of an income tax. B. the higher an individual's wealth, the greater his or her ability to pay, other things - including income - being the same. C. reduces the concentration of wealth, which is desirable socially and politically. D. are payments for benefits that wealth holders receive from government. E. all of these answer options are correct.
All of the following are mechanisms which reduce the adverse selection problem except ____
a. warranties from established enterprises with non-redeployable assets b. high interest rates c. large collateral requirements d. brand names and product-specific promotions and retail displays e. higher prices in repeat customer transactions
Which of the following most clearly illustrates the concept of derived demand?
a. An increase in the price of steak causes the demand for poultry to increase. b. An increase in the demand for new houses leads to an increase in the demand for construction workers. c. An increase in consumer income leads to an increase in the demand for services provided by the government. d. An increase in the demand for new cars causes the demand for used automobiles to rise.
Normative economics deals with ____ and positive economics deals with ____
a. what should be; what is b. fiction; fact c. microeconomics; macroeconomics d. negative aspects; positive aspects e. changing circumstances; same circumstances