If it is NOT profitable for more than one firm to be in an industry, we have an example of
A) monopoly due to ownership of key resources.
B) monopoly due to governmental entry restrictions.
C) monopoly due to economies of scale.
D) pure competition.
Answer: C
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In the late 1970s, savings and loans institutions were in financial trouble because they
A) had to pay low interest rates to attract depositors, but were earning low interest rates from past investments. B) had to pay low interest rates to attract depositors, but were earning high interest rates from past investments. C) had to pay high interest rates to attract depositors, but were earning high interest rates from past investments. D) had to pay high interest rates to attract depositors, but were earning low interest rates from past investments.
Which of the following statements is true?
A) Positive economics describes what people ought to do. B) Normative economics describes what people actually do. C) Positive economics generates objective descriptions that can be verified with data. D) Normative economics is free from value judgments, tastes, and preferences of economic agents.