Pure competition produces a socially optimal allocation of resources in the long run because:
A. marginal cost equals marginal revenue.
B. marginal cost equals average total cost.
C. marginal cost equals price.
D. marginal revenue equals price.
Answer: C
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As a monopolist expands its output:
A) the difference between the demand curve and the marginal revenue curve decreases. B) the difference between the demand curve and the marginal revenue curve increases. C) the slope of the demand curve decreases, while the slope of the marginal revenue curve increases. D) the slope of the demand curve increases, while the slope of the marginal revenue curve decreases.
Eurobank spreads exceed U.S. spreads
Indicate whether the statement is true or false
The ________ problem of discretionary policy arises because economic behavior is influenced by what firms and people expect the monetary authorities to do in the future
A) moral hazard B) time-inconsistency C) nominal-anchor D) rational-expectation
When government purchases increase, the spending multiplier indicates the _____
a. amount of movement along the aggregate demand curve b. amount of movement along the aggregate supply curve c. size of the rightward shift of the aggregate demand curve at a given price level d. size of the rightward shift of the aggregate supply curve at a given price level e. size of the expansionary gap