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Economics 15) In economics, the cost of something is __________. A.

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15) In economics, the cost of something is __________.

A. often impossible to quantify, even in principle

B. the dollar amount of obtaining it

C. always measured in units of time given up to get it

D. what you give up to get it

16) Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms' production levels as given. Then in equilibrium the output effect __________.

A. can be larger or smaller than the price effect

B. must dominate the price effect

C. must be smaller than the price effect

D. must balance with the price effect

17) There are two types of markets in which firms face some competition yet are still able to have some control over the prices of their products. The names given to these market structures are __________.

A. duopoly and imperfect competition

B. duopoly and triopoly

C. monopolistic competition and oligopoly

D. perfect competition and monopolistic competition

18) Which of the following would be most likely to contribute to the breakdown of a cartel in a natural resource (e.g., bauxite) market?

A. Unequal member ownership of the natural resource

B. Low price elasticity of demand

C. High prices

D. High compatibility of member interests

19) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________.

A. plus the cost of tuition, equals the opportunity cost of going to college

B. should be counted only to the extent that they are more expensive at college than elsewhere
C. should be counted in full, regardless of the costs of eating and sleeping elsewhere

D. usually exceed the opportunity cost of going to college

20) A rational decision maker __________.

A. takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions
B. ignores the likely effects of government policies when he or she makes choices

C. ignores marginal changes and focuses instead on “the big picture”

D. takes an action only if the marginal benefit of that action exceeds the marginal cost of that action

21) The price of a good that prevails in a world market is called the

A. world price.

B. relative price.

C. absolute price.

D. comparative price.

22) The Federal Open Market Committee __________.

A. is required by its charter to change the money supply using a complex formula that concerns the tradeoff between inflation and unemployment
B. is required to increase the money supply by a given growth rate each year

C. operates with almost complete discretion over monetary policy

D. is required to keep the interest rate within a range set by Congress

23) Real GDP __________.

A. is a measure of the value of goods only; it excludes the value of services.

B. evaluates current production at the prices that prevailed in some specific year in the past.

C. evaluates current production at current prices.

D. is not a valid measure of the economy's performance, since prices change from year to year.

24) The balance of payment account is made up of:

A. a monetary account and a fiscal account.

B. an import account and an export account.

C. a current account and a financial and capital account.

D. an investment account and a consumption account.

25) The political business cycle refers to __________.

A. changes in output created by the monetary rule the Fed must follow

B. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle
C. the fact that about every four years some politician advocates greater government control of the Fed
D. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected

26) The model of short-run economic fluctuations focuses on the price level and __________.

A. Net GDP

B. the neutrality of money
C. real GDP

D. economic growth

27) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.

A. the sacrifice ratio dilemma

B. the time inconsistency of policy

C. inflation targeting

D. the monetary policy reaction lag
Submitted: 5 years ago.
Category: Homework
Expert:  Chris M. replied 5 years ago.

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