In the market for real output, the initial effect of an increase in the money supply is to ?

A. Shift the aggregate supply curve to the right
B. Shift the aggregate supply curve to the left
C. Shift the aggregate demand curve to the left
D. Shift the aggregate demand curve to the right

Satellite television subscription and television detection devices are ways in which broadcasting companies address the ________ problem?

A. Externality
B. Market imperfection
C. Deadweight burden
D. Free rider

Keynes liquidity preference theory of the interest rate suggests that the interest rate is determined by ?

A. Aggregate supply and aggregate demand
B. The supply and demand for loanable funds
C. The supply and demand for money
D. The supply and demand for labor

Market failure may arise because of ?

A. imperfect competition
B. taxation
C. externalities
D. missing markets

A good example of a public good is ?

A. Public transport
B. The national health service
C. National defence
D. Rail transport

If my neighbour burns garden waste causing my house to fill with smoke this is an example of ?

A. A production externality
B. A second-best solution
C. Transaction costs
D. A consumption externality

A competitive equilibrium is Pareto-efficient because ?

A. producers are price takers
B. consumers and producers face the same prices
C. marginal costs and benefits are equal
D. prices equal marginal cost and benefit

When a market is contestable, incumbent firms must __________ to avoid the entry of new competitors?

A. Behave like competitive firms
B. Agree to act together
C. Differentiate their products
D. Practice price discrimination

In Nash equilibrium each player chooses the best strategy ?

A. Assuming other players move first
B. Dominated by the other players
C. Given the strategies of other players
D. That is a credible threat

In the insurance industry, high-risk customers are more likely to take out insurance. This is an example of ?

A. Moral hazard
B. Risk aversion
C. Adverse selection
D. A poor gamble