Which of the following best approximates a pure monopoly?
A. The Kansas City wheat market
B. The only bank in a small town
C. The soft drink market
D. The foreign exchange market
Answer: B
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If the objective of economic policy is to decrease the amount of pollution by an industry in the long run, the
A. most effective policy action would be a subsidy to firms for the reduction of emissions. B. most effective policy action would be a tax on polluting firms. C. appropriate course of action for government is to do nothing. D. appropriate course of action for government is to increase R&D outlays to develop technology to remove the emissions from the environment.
American citizens planning a vacation abroad that would require foreign currency would welcome:
A. Depreciation of the dollar. B. Appreciation of the dollar. C. Appreciation of the foreign currency. D. Devaluation of the dollar.
Refer to the graph shown. To maximize profit, this perfectly competitive firm should produce:
A. 30 units of output. B. 60 units of output. C. 50 units of output. D. 40 units of output.
Which of the following actions does not promote capital deepening?
(A) Raising taxes to pay for building roads. (B) A low population growth rate at the same time that capital stock expands. (C) Borrowing money from foreign nations to invest in building infrastructure in this country. (D) Saving less and spending more of one's disposable income.