How does the idea of efficient markets influence the long-run market adjustment mechanism?
What will be an ideal response?
Investment capital flows toward profit opportunities. In the long run this leads to entry, exit, expansion, and contraction in an industry.
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List some examples of the scarcity that you face
What will be an ideal response?
Modem economic growth refers to the idea of experiencing:
A) an increase in population at the same rate as the increase in output. B)an increase in population at a faster rate than an increase in output. C)an increase in output per person as compared to an increase in output. D)an increase in output as compared to an increase in output per person
During the production process Ajax Corporation releases pollution into the air. Ajax Corporation operates in a monopolistic competitive industry. Which of the following statements addresses the pollution situation?
A) Ajax is taking advantage of asymmetric information. B) This is an example of a market failure and is a reason for the government to regulate the industry. C) The quality of the product could be improved if the amount of pollution can be reduced. D) This is known as the lemons problem.
David Card and Alan Krueger conducted a study of fast-food restaurants in New Jersey and Pennsylvania. The study found that
A) there was a large reduction in employment of low-skilled workers when the minimum wage was raised in these states. B) the earned income tax credit is more effective in raising the incomes of low-skilled workers than increases in the minimum wage. C) increases in the minimum wage had a very small impact on employment. D) increases in the prices of food have a greater effect on wage increases in New Jersey than in Pennsylvania.