Can consumption efficiency be achieved even if the efficient product mix is not achieved?
What will be an ideal response?
Efficiency in consumption implies that all consumers have the same MRS. This can be achieved with any product mix. Thus, consumers can be as well off as possible for any given product mix. If the product mix is inefficient, consumers can still make the best of it even though a different product mix could make them even better off.
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Checking deposit are ________ the M1 measure of money and ________ the M2 measure of money.
A. excluded from; excluded from B. excluded from; included in C. included in; included in D. included in; excluded from
If a contestable market has only one seller, which of the following will keep the seller from producing inefficiently and charging a price that generates long-run economic profits?
a. government regulations b. low costs of entry into and exit from the market c. substantial economies of scale that provide a competitive advantage to large firms in such markets d. the threat of a government takeover of the firms in these markets
Existing firms in the rental car industry will stay in the industry but will not want to undertake any investment projects other than to replace depreciating capital stock if the normal rate of return in the industry is ________ and the return that firms earn in this industry equals exactly ________.
A. 6%; 6% B. 4%; 7% C. 1%; 2% D. 12%; 9%
When comparing the severity of recessions since World War II, economists focus on the ones in
A. 2001 and 2007-2009. B. 1968 and 1974. C. 1990 and 2001. D. 1982 and 2007-2009.