The forces of supply and demand will provide a quantity that is:
A. less than the efficient quantity if a good generates external benefits.
B. more than the efficient quantity if a good generates external benefits.
C. exactly the efficient quantity if a good generates external benefits.
D. either more than or less than the efficient quantity if a good generates external benefits. It is impossible to know whether it will be too much or too little without more information.
Answer: A
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The above table shows data from the GDP accounts of Hypothetica. Hypothetica's GDP is ________ billion
A) $270 B) $210 C) $190 D) $160
Suppose the cross-price elasticity of demand between grapefruit juice and orange juice is approximately 6. What does this mean?
A) A 1 percent decrease in the price of grapefruit juice leads to a 6 percent increase in orange juice consumption. B) A 6 percent increase in the price of grapefruit juice leads to a 1 percent increase in orange juice consumption. C) The demand for orange juice is 6 times greater than the demand for grapefruit juice. D) If the price of grapefruit juice rises by $1, 6 more cartons of orange juice will be purchased.
Moral hazard is a problem that arises:
A. before the parties have entered into an agreement. B. after the parties have voluntarily entered into an agreement. C. either before or after the parties have entered into an agreement. D. rarely in any market
In the long run, monopolistically competitive firms typically produce with allocative efficiency
a. True b. False Indicate whether the statement is true or false