In a competitive market for a private good with no price or quantity regulations, no external cost nor external benefit, low transactions costs, and no taxes or subsidies,
A) the allocation of resources is planned by the government.
B) production is organized by government organizations.
C) efficiency can be attained in the market with no government intervention.
D) efficiency is usually be achieved by majority rule.
E) efficiency is generally obtained by using a command system.
C
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According to this Application, the dry dust wind known as the harmattan has caused ________ of cocoa pods
A) an increase in the supply B) a decrease in the demand C) a decrease in the supply D) an increase in the demand
If the production possibilities frontier of one trade partner ("Country A") is bowed out (concave to the origin), then increased specialization in production by that country will
A) increase the economic welfare of both countries. B) increase the economic welfare of only Country A. C) decrease the economic welfare of Country A. D) decrease the economic welfare of Country B. E) not affect the economic welfare of either country.
Which of the following bond ratings by Moody's Investors Service would NOT be considered to be below investment grade?
A) Baa B) Ba C) B D) All of these ratings are considered below investment grade.
The excess capacity theorem implies that
A. consumers would be better off if some monopolistically competitive firms left their markets. B. consumers would be better off with more standardization of products. C. monopolistic competition benefits society by eliminating excess capacity in production. D. monopolistic competition wastes some of society’s resources but the elimination of this waste does not necessarily benefit consumers.