Refer to the below graph of a hypothetical market for health care. The efficiency loss caused by the provision of health insurance covering four-fifths of the cost is given by the area:
A. egf
B. edc
C. eab
D. cdab
C. eab
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A cartel arrangement is likely to be successful for its members only if it can
A) assign sales to specific members. B) keep new firms from entering the industry. C) prevent firms not in the cartel from marketing close substitutes. D) do all of the above.
According to the growth version of the quantiy theory of money, the growth rate of the money supply equals the inflation rate plus the growth rate of real output
a. True b. False Indicate whether the statement is true or false
Which assumption(s) is (are) necessary for an efficient allocation of resources among firms?
A. Firms behave so as to maximize their profits. B. All firms pay the same prices for inputs. C. Factor markets are open and competitive. D. All of the above are correct.
A system of property rights
A) encourages economic growth by creating incentives to invest in capital and to be innovative. B) discourages economic growth by discouraging the development of new ideas and ways of doing things. C) reduces the efficiency of government, which reduces the growth rate of the economy over time. D) encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.