Answer the following statements true (T) or false (F)
1. Market failures refer to those situations where the sellers are not producing as much as the buyers are wanting to buy.
2. Demand-side market failures refer to those situations when there is a shortage in the market because buyers want to buy more than what is available in the market.
3. When a producer cannot get all consumers of their product to pay for enjoying it, such as in the case of a fireworks display, then we'd have a demand-side market failure.
4. Whenever there are supply-side market failures in the form of costs that suppliers do not have to face, then there will be overproduction of the output.
1. FALSE
2. FALSE
3. TRUE
4. TRUE
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A sharp reduction in the U.S. debt-GDP ratio occurred
A) between 1998 and 2001 . B) between 1996 and 1997. C) between 1994 and 1995. D) between 1993 and 1995.
The marginal rate of substitution between two goods always equals the
a. marginal utility of one divided by the marginal utility of the other. b. marginal utility of one times the marginal utility of the other. c. price of one good divided by the price of the other. d. Both a and c are correct.
Considering its direct effect on income, which of the following policies is most likely to reduce a country's trade deficit?
A. An increase in the money supply B. An increase in taxes C. An increase in government spending D. A cut in taxes
If the internal rate of return from an investment is more than the opportunity cost of funds the firm should:
A. not make the investment. B. only make the investment using retained earnings. C. make the investment. D. only make part of the investment and wait to see if interest rates decrease.