Households
A) have no involvement in the circular flow in a market economy.
B) purchase resources in the factor market.
C) sell goods in the product market.
D) sell resources in the factor market.
Answer: D
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Refer to Figure 6-10. A perfectly inelastic supply curve is shown in
A) Panel A. B) Panel B. C) Panel C. D) Panel D.
If firms in a monopolistically competitive market are earning economic profits, which of the following scenarios best reflects the change a representative firm experiences as the market adjusts to its long-run equilibrium?
A) Demand decreases and becomes less elastic. B) Demand increases and becomes less elastic. C) Demand increases and becomes more elastic. D) Demand decreases and becomes more elastic.
A perfectly competitive steel mill that produces large amounts of a pollution (a negative externality) will, from a social point of view, produce:
a. too little steel. b. the socially optimal quantity of steel. c. too much steel. d. too much steel only if it installs pollution control equipment.
Trade between two nations is complicated by
a. the variability in exchange rates of the respective nation's currencies. b. different production techniques in the nations. c. the age and experience of the respective nation's diplomats. d. the variability in climate between the nations.