All of the following apply to the description of a market in equilibrium except:
A. quantity supplied equals quantity demanded.
B. the intersection of the supply and demand curves.
C. no excess supply exists.
D. the price of the good is falling.
Answer: D
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The curve labeled A in the above figure is a
A) short-run aggregate demand curve. B) short-run aggregate supply curve. C) long-run aggregate demand curve. D) long-run aggregate supply curve.
An externality is internalized if
A. the person(s) or group that generated the externality incorporate into their own private cost-benefit calculations the external benefits (in the case of a positive externality) or the external costs (in the case of a negative externality) that third parties bear. B. people are made aware of it and realize that social benefits are less than private benefits (in the case of a positive externality) and that social costs are less than private costs (in the case of a negative externality). C. the person(s) or group that generated the externality do not incorporate into their own private cost-benefit calculations the external benefits (in the case of a positive externality) or the external costs (in the case of a negative externality) that third parties bear. D. b and c E. none of the above
Explain how the short-run supply curve of the competitive firm is derived
In the above figure, the profit-maximizing output and price for this monopolistically competitive firm are
A. 10,000 units at a price of $5 per unit. B. 10,000 units at a price of $10 per unit. C. 12,000 units at a price of $8 per unit. D. 13,000 units at a price of $7 per unit.