Suppose a valley periodically floods. A dam can be built in the river that would prevent the flooding. Explain how flood control provided by building the dam arguably fits the characteristics of a public good.
What will be an ideal response?
Ques. 2Why do firms in a monopolistically competitive industry advertise?
What will be an ideal response?
Ques. 3An inverse relationship will be graphed as
A) a line that is upward sloping.
B) a line that is downward sloping.
C) a loop.
D) a U-shaped curve.
Ques. 4In New York City, apartment rent can be adjusted only when a tenant leaves. This leads
A) people to change apartments often.
B) landlords to encourage tenants to stay in their apartments.
C) tenants to stay in apartments longer than they would otherwise.
D) businesses to build new rental units.
Ques. 5What is oligopoly? How does oligopoly differ from the other kinds of market structure?
What will be an ideal response?
Ques. 6Explain why ensuring economic stability is an economics function of government?
What will be an ideal response?
Ques. 7Using productive resources to make capital goods requires that we
A) get everyone to agree on the best use of those resources.
B) get government approval of our plan to make capital goods.
C) forgo some level of current consumption.
D) prove that the existence of the capital goods will not cause any environmental damage.
Ques. 8Which of the following statements about natural monopoly is correct?
A) Governments regulate natural monopolies in order to ensure that costs of production are minimized.
B) Governments regulate natural monopolies in order to ensure that the firm earns a normal profit.
C) Governments regulate natural monopolies in order to prevent them from making profits.
D) Governments regulate natural monopolies in order to keep their workers from earning wages that are too high.
Ques. 9Other things being constant, the only way to move along a given supply curve for a product is for
A) the product's relative price to change.
B) the future relative price of related goods to change.
C) the number of sellers to change.
D) technological changes to occur.
Ques. 10What are the implications of there being a large number of firms in a monopolistically competitive market?
What will be an ideal response?
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