Explain why the price doesn't change when a market is in equilibrium
It doesn't change because there is no excess demand or excess supply to trigger bargaining activity in order
to force a price change.
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Starting at the top of a straight-line downward sloping demand curve, as the price falls, total expenditures will
A) initially increase and then decrease. B) initially decrease and then increase. C) increase along the entire demand curve. D) decrease along the entire demand curve.
Some critics of capitalism argue that
a. There is too much government intervention in the economy b. Involuntary trade generates no wealth c. If one person makes money, someone else must be losing it d. Voluntary trade ensures gains for both consumers and producers
If the production of a good generates a detrimental externality, then at that level of production of the good under perfect competition,
a. MU = MSC. b. P < MPC. c. MPC < MSC. d. MPC > MSC.
One of the portfolio choices people must make is whether to deposit idle funds in a bank or purchase government bonds.
a. true b. false