When businesses have market power, they are able to charge a price higher than the price charged by a business in perfect competition. Thus,the market power equilibrium on a diagram will be
A. lower and to the left of the perfect competition equilibrium.
B. lower and to the right of the perfect competition equilibrium.
C. higher and to the right of the perfect competition equilibrium.
D. higher and to the left of the perfect competition equilibrium.
Answer: D
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Which of the following statements is true?
A) Normative statements depend on personal preferences. B) Normative economic statements can be confirmed or disproven. C) Positive economics recommends what people ought to do. D) Positive economics deals with issues that are subjective.
Gross domestic product (GDP) figures tend to understate the quantity of goods and services available because: a. GDP excludes the value of goods produced at home
b. many items are counted twice or more in the intermediate stages of production. c. more women are entering the labor force. d. firms often add less to inventories than they planned to. e. exports are subtracted from GDP but imports are not added.
Property rights and a strong titling system are seen as important to economic development because they allow:
A. loans to be taken out against the equity of their assets, increasing investment. B. loans to be taken out without risk, increasing the quality, not quantity, of investment. C. savers to invest in property and capital. D. agencies with authority to verify titling to thrive in the economy.
When a firm's fixed costs increase it should raise its prices in order to maximize profits
a. True b. False Indicate whether the statement is true or false