Figure 15-2
The firm illustrated in Figure 15-2 is producing
A. less than it would if the external costs were internalized.
B. more than it would if external costs were internalized.
C. a beneficial externality.
D. at the socially optimal point.
Answer: B
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Holding all else equal, if the U.S. government imposes tariffs on imported products, then the equilibrium value of the U.S. dollar will:
A. be determined by the Federal Reserve. B. depreciate. C. remain fixed. D. appreciate
The natural unemployment rate is equivalent to all of the following EXCEPT the unemployment rate when:
A. the unemployment rate is zero. B. there is no output gap. C. cyclical unemployment is zero. D. there is only frictional and structural unemployment.
In the long run, a monopolistic competitor: a. earns a normal rate of return
b. sells a level of output at which marginal revenue is less than price. c. sells a level of output at which marginal revenue equals marginal cost. d. is characterized by all of the above.
The quality adjustment bias of the CPI refers to the failure of statisticians to:
A. allow for the possibility that consumers switch stores at which they shop. B. allow for the possibility that consumers switch from products whose prices are rising. C. take into account improvements in goods and services. D. take into account price changes in goods and services.