When the profit-maximizing output level for a firm can be decided by setting output at the level where price is equal to marginal cost, the market structure is
a. perfect competition
b. monopolistic competition
c. duopoly
d. monopoly
e. oligopoly
A
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When the aggregate expenditures function of a closed economy is plotted against real GDP, any point on the 45-degree line represents C + I + G = Y, where C = Consumption, I = Investment, G = Government spending, and Y = Real GDP
a. True b. False Indicate whether the statement is true or false
A market economy allocates resources primarily in accordance with orders from government bureaucrats
a. True b. False Indicate whether the statement is true or false
Assuming that bus travel is an inferior good, an increase in consumer income, other things being equal, will cause a(n):
A. upward movement along the demand curve for bus travel. B. downward movement along the demand curve for bus travel. C. rightward shift in the demand curve for bus travel. D. leftward shift in the demand curve for bus travel.
Asymmetric information before a transaction takes place generates the problem of
A. adverse selection. B. bank runs. C. moral hazard. D. irrational behavior.