The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell
a. True
b. False
Indicate whether the statement is true or false
False
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The term that is used to refer to a situation in which one party to a transaction has more or better information than the other party is
A) adverse selection. B) asymmetric information. C) moral hazard. D) deceptive trade practices.
Objects in and of themselves have no costs. Lunches are an object, so they presumably have no cost. Yet we often hear economists say, "There is no such thing as a free lunch." Are economists being inconsistent?
A) It is impossible to tell. B) Yes, if the statement implies lunch actually has a cost. C) No, if the statement implies the decision to offer lunches free of charge entails the sacrifice of scarce resources, which could have served other useful purposes. D) Both B and C are true.
A consumer is in equilibrium when:
a. his or her marginal utility derived from each good is maximized. b. each dollar spent on each item provides more and more satisfaction. c. each dollar spent on each item provides less and less satisfaction. d. the last dollar spent on each item provides the same additional satisfaction as that dollar would if spent on any other item. e. his or her average utility for each item is the same.
If a monopoly firm is continually earning above-normal profits, then
a. the entry of new firms will reduce profits to normal in the long run b. the profits may remain above-normal in the long run despite the entry of new firms c. market forces other than the entry of new firms will reduce profits to normal in the long run d. falling market demand due to the firm's high prices will reduce profits to normal in the long run e. barriers to entry may enable the profits to remain above-normal in the long run