In equilibrium, the marginal benefit and cost of the public good will be
A) $7
B) $6
C) $5
D) $3
Ans: B) $6
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Which of the following shifts the demand curve for movies leftward?
A) a decrease in the price of NetFlix, a substitute for movies B) a decrease in the price of movie tickets C) an increase in movie star salaries D) an increase in incomes, assuming movies are a normal good E) an increase in the price of movie tickets
Economists have long debated whether there is a significant loss of well-being to society in markets that are monopolistically competitive rather than perfectly competitive
Which of the following offers the best reason why some economists believe that monopolistically competitive markets are less efficient than perfectly competitive markets? A) In contrast to perfectly competitive markets, firms in monopolistically competitive markets can charge a price greater than average total cost in the short run. B) In contrast to perfectly competitive markets, firms in monopolistically competitive markets do not produce where price equals average total cost in long-run equilibrium. C) In contrast to perfectly competitive markets, neither allocative efficiency nor productive efficiency are achieved in monopolistically competitive markets. D) In contrast to perfectly competitive markets, firms in monopolistically competitive markets earn economic profits in long-run equilibrium.
An unplanned economy operating under laissez-faire
A. allocates resources by market supply and demand. B. cannot respond to basic questions about production and distribution. C. shows breakdowns with frequent surpluses and shortages. D. allocates goods and services under government subsidy.
Net exports must always be a positive amount
Indicate whether the statement is true or false