The creation of a monopoly results in gains to
A) producers at no expense to consumers.
B) consumers at no expense to producers.
C) producers at the expense of consumers.
D) consumers at the expense of producers.
Ques. 2In order for a price ceiling to have an effect on the market, must it be set above or below the equilibrium price? Why?
What will be an ideal response?
Ques. 3Of the following items, which has the most inelastic demand?
A) food
B) fruit
C) apples
D) Gala apples
Ques. 4Which of the following is NOT an advantage of firm coordination of economic activity?
A) Firm coordination decreases transactions costs.
B) When firms coordinate economic activity, there are no opportunity costs.
C) Firms can take advantage of the economies of team production.
D) Economies of scope can be realized by firms that produce a range of goods and services that share specialized resources.
Ques. 5The firms in a perfectly competitive are making an economic profit when new firms enter. The entry shifts the short-run market supply curve ________, the market price ________, and each firm's economic profit ________.
A) leftward; rises; decreases
B) rightward; rises; increases
C) rightward; falls; decreases
D) leftward; falls; decreases
Ques. 6Suppose the Fed buys government securities from a commercial bank. Why is there a multiplier effect on the quantity of money?
What will be an ideal response?
Ques. 7The U.S. Gini ratio for income has ________ within recent decades, which means economic inequality has ________.
A) decreased; increased
B) decreased; decreased
C) increased; decreased
D) increased; increased
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