If a perfectly competitive firm is producing the short-run profit-maximizing quantity and is earning positive economic profits, the firm should anticipate ________.
A) the market equilibrium price to increase
B) the market equilibrium price to decrease
C) earning economic profits indefinitely
D) the market supply to decrease
B) the market equilibrium price to decrease
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Specialization and exchange result from differences in productivity that lead to
A) self-sufficiency. B) comparative advantage. C) absolute advantage. D) opportunity cost.
The solution of a game is dependent upon
a. predicted response of competitors b. the existence of a perfectly inelastic demand curve c. costs of production being constant d. economies of scale in production e. marginal revenue being equal to marginal cost
Monetary policy that is focused on stimulating the economy is known as __________ monetary policy.
a. tight b. free c. expansionary d. contractionary
When a negative externality exists, _______________________ and thus _______________ intervention may be needed to achieve efficiency
A) external costs are necessarily greater than private costs; government B) social costs equal private costs; no government C) social costs are less than private costs; government D) social costs are greater than private costs; government E) none of the above