When will an industry's long-run supply curve be horizontal at firms' break-even price?
a. When expansion of the industry allows new input markets to develop.
b. When some firms are more efficient than others.
c. When specialized skills play a significant role in production.
d. When firms are identical and there is no factor-price effect.
d. When firms are identical and there is no factor-price effect.
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The figure above shows the market for pants. If 6 million pairs of pants are produced, the deadweight loss is
A) zero. B) the triangle ABE. C) the triangle BCE. D) the triangle ACE. E) the triangle BCE minus the triangle ABE.
Which of the following was an underlying cause of the economic crisis of 2008?
a. a failure of government to impose regulations on Fannie Mae, Freddie Mac, and other mortgage lenders b. the imposition of government regulations on Fannie Mae, Freddie Mac, and other lending institutions that eroded the conventional lending standards in place prior to the mid-1990s c. greedy mortgage lenders who extended risky loans to sub-prime borrowers even though the regulators were trying to limit these loans d. federal housing regulations that made it difficult for Fannie Mae, Freddie Mac, and other lending institutions to obtain sufficient loanable funds for the finance of housing construction
Superstar professional athletes can sustain their economic rents because:
A. team owners will pay anything to win a championship. B. they are represented by highly-skilled agents. C. they have unique talents that they can sell to the highest bidder. D. their opportunity costs of playing their sport are high.
Which of the following is not a weakness of fiscal policy?
What will be an ideal response?