When two variables have a direct relationship, the slope is
A) negative.
B) positive.
C) zero.
D) infinity.
Ques. 2Rent controls often have adverse effects, including
A) too much housing in a community.
B) deterioration in the quality of existing rental units.
C) too much construction of new rental units in the community.
D) income transfers from the poor to landlords.
Ques. 3Suppose Nabisco merges with both a wheat firm and milling firm. This is an example of a
A) vertical merger.
B) horizontal merger.
C) parallel merger.
D) diagonal merger.
Ques. 4Keynesian economists would likely argue that the classical model is which of the following?
A) a long-run theory
B) a short-run theory
C) both a long-run and short-run theory
D) a sticky price theory
Ques. 5What is the free-rider problem, and how is it related to public goods?
What will be an ideal response?
Ques. 6An unregulated natural monopolist will produce the quantity at which
A) average total costs are minimized.
B) marginal cost equals marginal revenue.
C) marginal cost equals the long run average cost curve.
D) the long-run average cost curve intersects the demand curve.
Ques. 7The trade-off between the present and future consumption is measured by
A) the money cost of both the present and future consumption.
B) the foregone present consumption.
C) the difference between the money price of future goods and the money cost of producing them.
D) the difference between the money price of present goods and the money cost of producing them.
Ques. 8In general, any ceteris paribus determinant of supply that is favorable to production will
A) cause a movement along the supply curve.
B) shift the supply curve to the right.
C) shift the demand curve to the left.
D) shift the supply curve to the left.
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