If it's possible to eliminate the problems created by externalities, why do they persist?
A. Creating a more efficient solution does not mean it will have a fair distribution of that surplus.
B. It can be difficult to coordinate the millions of market participants.
C. They can be diffuse, complex, and hard to control.
D. All of these statements are true.
Answer: D
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Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very little business. Aiyanna now decides to lower pizza prices by 5% per week for an indefinite period of time. We can expect that each successive week
A. demand will become less price elastic. B. the elasticity of supply will increase. C. price elasticity of demand will not change as price is lowered. D. demand will become more price elastic.
In the short run, firms in monopolistically competitive markets
A. produce the output level where marginal revenue equals marginal cost. B. can earn economic profits. C. face a downward-sloping demand curve. D. All of these responses are correct.
Which of the following best illustrates a perfectly competitive market?
A. jeans B. breakfast cereal C. electric power D. soybeans
Television programming might be targeted for protection in a country using which of the following arguments?
A) Infant industry B) National security C) Labor argument D) Cultural protection