Which of the following might cause a market to produce a quantity that is less than optimal?
a. A price ceiling above the market equilibrium price.
b. Market control by a monopolist.
c. A subsidy to low-income consumers.
d. None of the above.
B
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A demand schedule shows the time over which different quantities will be demanded.
Answer the following statement true (T) or false (F)
Economies of scale is another term for
a. increasing returns to scale. b. constant returns to scale. c. increasing marginal physical productivity. d. decreasing returns to scale.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
An insecure monopoly is one where:
A. a new patent has been granted. B. the possibility of a second firm entering exists. C. no other firms can enter. D. price-fixing is illegal under the Sherman Act.