Which of the following are options available to government when dealing with monopolies?
a. b, c, and e
b. nationalization
c. marginal cost pricing regulation
d. marginal revenue pricing regulation
e. breaking up the firm
A
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An increased equilibrium price and a decreased equilibrium quantity results from a(an):
a. decrease in demand. b. increase in supply. c. decrease in supply. d. increase in demand.
Suppose that in order to estimate of the average effect of participation in a job training program (train) on wage, you included controls for education (educ), years of experience (exper) in your model: log(wage) = 
+ 
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+ 
+ u . Which of the following is a reason why the coefficient, 
, might be biased?
A. Exper is uncorrelated with train.
B. Educ is likely correlated with both wage and train .
C. Educ and exper are highly correlated with each other.
D. There might be some other variable that is also correlated with both wage and train.
In the late 1990's, the Wall Street Journal suggested that the stock market is grossly undervalued even while it is breaking all time records monthly. Its argument was that the risk factor of stock was being reduced dramatically due to increased stability in the economy and the prospects for continued long-term growth. Illustrate how this assumption about the economy leads to a rational bidding up of stock prices.
What will be an ideal response?
Nations that borrow from abroad to support current investment will
A) always sacrifice future consumption. B) sacrifice future consumption only if the investments are profitable. C) always be better off in the future. D) be better off in the future if the investments are profitable.