Markets tend to overallocate resources to the production of a good when
A) there are negative externalities.
B) there are positive externalities.
C) there are public goods produced.
D) equilibrium occurs.
A
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During 2008 the supply of gasoline decreased while at the same time the demand for gasoline increased If the magnitude of the increase in demand was greater than the magnitude of the decrease in supply, then the equilibrium price of gasoline ________ and the equilibrium quantity ________.
A) increased; increased B) increased; decreased C) increased; did not change D) decreased; did not change E) did not change; increased
If an increase in the growth rate of AD leads to an increase in real GDP in the short run: a. the increase in AD was correctly anticipated
b. the increase in AD was greater than anticipated. c. the increase in AD was less than anticipated. d. the increase in AD could have been any of the above.
A winner-take-all labor market is one in which:
A. large differences in human capital translate into small differences in wages. B. small differences in human capital translate into small differences in wages. C. one worker receives all of the available compensation and the rest receive nothing. D. small differences in human capital translate into large differences in wages.
Alcoa had a monopoly in the U.S. aluminum market from the late nineteenth century until the end of World War II. Which barrier to entry was the source of Alcoa's monopoly power?
A. ownership of a vital resource B. government franchises and licenses C. patents and copyrights D. economies of scale