The term market failure refers to
a. a situation in which the market on its own fails to allocate resources efficiently.
b. an unsuccessful advertising campaign which reduces demand for a product.
c. a situation in which competition among firms becomes ruthless.
d. a firm that is forced out of business because of losses.
a
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A country has a comparative advantage in a good if
A. It always has an absolute advantage in the production of the good. B. It can produce more of the good than another country. C. It can specialize only in two goods. D. It can produce a good at a lower opportunity cost relative to another country.
Which of the following is characteristic of a monopolistically competitive firm?
A. The firm faces an upward-sloping demand curve. B. The firm faces an inelastic demand curve. C. The firm faces a horizontal demand curve. D. The firm produces a differentiated product.
Economists who favor activist monetary policy often argue that
A) during the mid-1970s, money supply growth rates were nearly constant and still the economy went through a recession. B) during the mid-1970s, activist monetary policy was applied and the economy was healthy and stable. C) activist monetary policy is inflexible and this is one of its virtues; the money supply doesn't change every year in response to political considerations. D) activist monetary policy is likely to be destabilizing most of the time, but still it is the better way to proceed.
If the current cash price is $8.80/bushel, storage costs are $0.15/bushel, August futures are currently trading at$9.20/bushel, and you expect the basis in July to be $0.20/bushel under August, then your expected profits from storing until July would be:
A. $0.05/bushel B. $-0.35/bushel C. $0.35/bushel D. $-0.05/bushel