Market failure occurs when
A. resources are misallocated, or allocated inefficiently.
B. perfectly competitive firms produce where MR = MC.
C. firms are only able to earn a normal profit.
D. firms that are incurring losses leave a market.
Answer: A
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If the government provides a subsidy in one industry and raises the tax revenue by taxing another industry, would, other things equal, cause welfare costs in both industries
a. True b. False Indicate whether the statement is true or false
To promote good economic outcomes, policymakers should strive to enact policies that
a. enhance productivity. b. enhance individuals' market power. c. result in a rapidly-growing quantity of money. d. All of the above are correct.
Give two examples of economic indicators, each of a different type (leading, coincident, or lagging). Explain what type of economic indicator it is and how it is used to analyze economic activity.
What will be an ideal response?
Sheila sells corn in a perfectly competitive market. This month Sheila receives a higher price for a bushel of corn than she did last month. Which of the following might explain this?
A. The market demand increased for corn. B. The market demand decreased for corn. C. Firms entered the market. D. Sheila's costs have decreased.