Which of the following is true of The Invisible Hand Theorem?
A. There can be no taxes of any kind.
B. The slope of the production possibilities curve is not affected by movements along the production contract curve.
C. Monopoly pricing will not distort efficiency as long as consumers are willing to pay the prices of the monopolists.
D. Any position on the consumer contract curve can be efficient.
Answer: D
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A few sellers may behave as if they operate in a perfectly competitive market if the market demand is:
A) highly inelastic. B) very elastic. C) unitary elastic. D) composed of many small buyers.
Most American firms are corporations
a. True b. False Indicate whether the statement is true or false
Gross private domestic investment
a. excludes all investment in the United States by foreign firms. b. includes all capital in the United States. c. includes net additions to the capital stock plus all new corporate stocks and bonds. d. includes business expenditures on new factories, tools, and machinery.
If an activity generates a positive externality, the government can increase total economic surplus by ________ the activity, and if an activity generates a negative externality, the government can increase total economic surplus by ________ the activity.
A. subsidizing; taxing B. subsidizing; banning C. publicizing; taxing D. taxing; banning