When rent controls establish a legal maximum rental rate below the equilibrium rental rate :

When rent controls establish a legal maximum rental rate below the equilibrium rental rate
 
  A) quantity demanded exceeds quantity supplied.
  B) quantity supplied exceeds quantity demanded.
  C) demand exceeds supply.
  D) supply exceeds demand.

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Ques. 2

In the above figure, assume the aggregate demand of the economy is AD2 and the Fed actions move aggregate demand to AD1. In this situation, the Fed has practiced
 
  A) contractionary monetary policy.
  B) expansionary monetary policy.
  C) irresponsible fiscal policy.
  D) Keynesian fiscal policy.

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Ques. 3

Which of the following does NOT cause a rightward shift in the supply curve?
 
  A) a reduction in resource costs
  B) an increase in technology
  C) a reduction in the price of the good
  D) a reduction in the expected future price of the good

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Ques. 4

Refer to the above figure. Regulators cannot force natural monopolies to operate in the long run at a loss. Therefore, they usually require the firms to charge a price equal to
 
  A) marginal cost, which is P1.
  B) marginal cost, which is P2.
  C) average cost, which is P3.
  D) average cost, which is P4.

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Ques. 5

Game theory would classify a cartel under the topic of
 
  A) zero-sum games.
  B) cooperative games.
  C) noncooperative games.
  D) dominant-strategy games.

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Ques. 6

Firms are more likely to devote resources to research and development when
 
  A) the country is in recession.
  B) they expect to earn rewards from successful research and development.
  C) it is easy to copy new techniques of other firms.
  D) the country has been experiencing slow economic growth in order to spur economic growth.

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Ques. 7

In the above figure, assume the economy starts out in equilibrium at point d. If the Fed increases the money supply so that the new aggregate demand curve is AD3, then the long-run equilibrium will be at point
 
  A) a.
  B) b.
  C) c.
  D) i.

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Ques. 8

A government-inhibited good is a good which
 
  A) is not subject to the principle of mutual exclusivity.
  B) the political process has deemed socially undesirable.
  C) can be consumed by one individual without affecting the consumption of another individual.
  D) the political process has deemed socially desirable.