Whenever there is a divergence between social costs and market costs, the result is:
A.) Market power.
B.) Market failure.
C.) Maximized social welfare.
D.) A higher minimum wage.
B.) Market failure.
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In the above figure, suppose the economy is initially at point a. If the nominal interest rate increases, there is a movement to point such as
A) b. B) c. C) d. D) e.
Using the concepts of community indifference curves and the production-possibility curve, explain how the international price of a good is determined in the Heckscher-Ohlin two-commodity model. What is the unit of measurement for the price of a good in this model?
What will be an ideal response?
If a variable input is added to some fixed input, beyond some point the resulting extra output will decline. This statement describes:
A. economies and diseconomies of scale. B. X-inefficiency. C. the law of diminishing returns. D. the law of diminishing marginal utility.
If demand for a product increases, ceteris paribus, the equilibrium:
A. price increases. B. price decreases. C. price remains unchanged. D. quantity decreases.