Figure 33-7
?
In Figure 33-7, the case for restrictive monetary and fiscal policy is strongest at point
A. A.
B. B.
C. C.
D. D.
Answer: D
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If products similar to the intermediate good are sold, an approximation to the correct transfer price is
a. average costs b. average fixed costs c. average variable costs d. the market price
Which of the following would most likely tell an economist if a policy is efficient?
a. positive analysis b. normative analysis c. subjective analysis d. correlation analysis
Which of the following statements is correct with respect to price elasticity of supply?
A. The price elasticity of supply tends to be greater as new firms can easily enter the market. B. The price elasticity of supply tends to be greater as expanding existing production facilities is less costly. C. The price elasticity of supply tends to be smaller as firms have limited production facilities. D. All of these are correct.
Answer the following statements true (T) or false (F)
1. Market failures refer to those situations where the sellers are not producing as much as the buyers are wanting to buy. 2. Demand-side market failures refer to those situations when there is a shortage in the market because buyers want to buy more than what is available in the market. 3. When a producer cannot get all consumers of their product to pay for enjoying it, such as in the case of a fireworks display, then we'd have a demand-side market failure. 4. Whenever there are supply-side market failures in the form of costs that suppliers do not have to face, then there will be overproduction of the output.