If some sellers exit a competitive market, how will this affect its equilibrium?
What will be an ideal response?
The market supply curve in a competitive market is a horizontal summation of individual supply curves. As a result, when some sellers exit the market, the market supply curve will shift to the left. With demand remaining unchanged, this will increase the equilibrium price and reduce the equilibrium quantity sold.
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According to the Coase theorem, part of what is needed for private transactions to be efficient is that property rights
A) must be defined, but it does not matter who owns the property. B) must be defined, and it is crucial as to who owns the property. C) need not be defined as long as there are no transactions costs present. D) need to be defined by the government to avoid producers from exploiting high transactions costs.
Refer to Figure 18-9 to answer the following questions
a. Did the distribution of income become more equal in 2016 that it was in 2015, or did it become less equal? Explain. b. If area A = 1,600, area B = 200, and area C = 3,200, calculate the Gini coefficient for 2015 and the Gini coefficient for 2016.
Because the labor supply curve for a monopsonist is upward sloping, the monopsonist
A) hires zero units of labor. B) chooses the perfectly competitive quantity of labor. C) must increase the wage to attract more units of labor. D) must take the wage as given by the market.
Membership in the Federal Reserve System is
a. limited to national banks. b. limited to state banks. c. required of national banks and open to state banks. d. forbidden to state banks.