A survey of income by county revealed that four of the five wealthiest counties were located in the suburbs surrounding Washington, D.C. Why?
Normally, wealth is associated with producing goods and services. Since there are no major manufacturing industries in the Washington area, we must attribute the wealth of these counties to the redistribution of wealth rather than its creation. The growth in the redistributive function of government has expanded the opportunity to engage in rent-seeking activities. This wealth probably reflects the success of the participants in the rent-seeking industry.
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In the long run, firms in monopolistic competition produce at a level that is ________ the efficient scale of output
A) less than B) equal to C) more than D) All of the above are possible depending on market conditions.
When there is overproduction of a good:
A. The marginal benefit of the good exceeds its marginal cost B. The marginal cost of the good exceeds its marginal benefit C. The net benefit of producing extra units if the good is positive D. The allocative efficiency is enhanced
Related to the Economics in Practice on page 68: One explanation for the increase in the price of the Baltimore newspaper is the increase in the cost of newsprint. This would cause the ________ of Baltimore newspapers to ________.
A. quantity supplied; increase B. supply; increase C. quantity supplied; decrease D. supply; decrease
Refer to the below graph of a hypothetical market for health care. If there was not health insurance, the equilibrium price and quantity of health care would be:
A. $20 and 600 units
B. $40 and 450 units
C. $60 and 300 units
D. $80 and 450 units