If new manufacturers enter the computer industry, then, holding all other things constant,
a. each "old" manufacturer must sell fewer computers than before.
b. some "old" manufacturers must exit the industry.
c. the equilibrium price of computers must rise.
d. the equilibrium quantity demanded of computers must rise.
d
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A free market fails when
A) firms that produce goods which create positive externalities go bankrupt. B) firms that produce goods which create negative externalities earn high profits. C) there is an external effect in either production, consumption, or both. D) there is government intervention.
The United States can produce 1,000 shoes if it specializes in shoe production. Alternatively, it can produce 500 shirts. Taiwan can produce 500 shoes or 200 shirts. Explain which country will specialize in shoe production and which in shirt production. What are the possible terms of trade?
In general, as units of resource inputs rise, their marginal revenue product
A. rises. B. stays the same. C. declines.
What is adverse selection? Give an example to illustrate this problem.
What will be an ideal response?