When a perfectly competitive, well-functioning market is not in equilibrium:
A. total surplus can be increased by a change in market price.
B. there are exchanges that can make some better off without someone becoming worse off.
C. the market is not efficient.
D. All of these are true.
Answer: D
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If an industry is characterized by economies of scale:
A) barriers to entry are usually not very large. B) long-run average costs of production increase as the quantity the firm produces increases. C) capital requirements are small due to the efficiency of the large-scale operations. D) the costs of entry into the market are likely to be substantial.
Fluctuations in the target interest rate in the New Keynesian model lead to all of the following except
A) procyclical real wages. B) procyclical employment. C) countercyclical prices. D) procyclical consumption.
Which of the following is an example of market governance?
a. A firm vertically integrating backward to own the necessary inputs b. A firm entering into a contract with input suppliers. c. A school recruiting a part-time teacher to cover for a permanent employee who falls very ill. d. A school requesting its permanent employees to cover for a teacher who suddenly falls ill.
Fiat money is money backed by
a. gold owned by the government. b. a commodity held by the government. c. trust in the government issuing it. d. bartering between consumers.