Which of the following is likely to cause market failure and be undersupplied?
A. Research
B. Orange juice
C. River water
D. Grazing pasture
A. Research
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Why did President George W. Bush feel the need for a stimulus package for the U.S. economy after September 11, 2001? As a conservative, what type of fiscal stimulus would be most appealing to President Bush?
Under monopolistic competition, there are
A. so many firms that no one can control the price. B. low barriers to entry. C. high barriers to entry. D. identical products.
Because there are very significant economies of scale involved in making flat screen television sets in a competitive market, the price of flat screen TVs will:
A. stay exactly the same regardless of any shifts in the demand curve. B. rise because of the combination of stronger demand and higher production costs. C. rise because the long run average total cost curve is upward-sloping over the entire range of output. D. fall as output expands because long-run average total costs are lower for higher quantities.
If an individual is to hold lower money balances on average, she must make more frequent trips to the bank to withdraw money. This inconvenience of reducing money holding is called:
A. a menu cost. B. a shoeleather cost. C. an inflation tax. D. seigniorage.