The presence of pollution in the dry cleaning industry leads in the long run to dynamic inefficiencies because
A) people will buy fewer clothes that need dry cleaning than they otherwise would have.
B) people will develop substitutes for dry cleaning that are wasteful.
C) firms will be induced to leave the industry because of artificially high costs.
D) firms whose average private cost is less than price will stay in (or enter) the dry cleaning industry even though their average social cost exceeds price.
E) firms whose average private cost exceeds the price will exit (or fail to enter) the dry cleaning industry even though their average social cost is less than price.
D
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Use the following graph to answer the next question.
If the federal funds market is at equilibrium at point C and the Federal Reserve decides to conduct an open-market sale, then it must be trying to set a ________.
A. lower target federal funds rate by increasing the amount of reserves in the market B. higher target federal funds rate by increasing the amount of reserves in the market C. higher target federal funds rate by reducing the amount of reserves in the market D. lower target federal funds rate by reducing the amount of reserves in the market
Refer to Figure 19.3. At the exchange rate of 90 yen per dollar, the United States is experiencing a
A) balance of payments deficit. B) current account deficit. C) capital account surplus. D) balance of payments surplus.
In the above table, what is the marginal physical product of worker 2?
A) 10 B) 18 C) 11 D) 9
Market structure is determined by the
a. volume of discounts, the quantity of foreign exchange, and the effects of Federal Reserve policy b. influence of government policy, the number of qualified buyers, and the effect of generally accepted accounting principles c. number of buyers and sellers, whether the product is standardized, whether there is free entry and exit, and how well informed the buyers and sellers are about the market d. volume of discounts, the effect of generally accepted accounting principles, and Federal Reserve policy e. influence of government policy, the quantity of foreign exchange, and the effects of Federal Reserve policy