All remedies for externalities share the goal of
a. moving the allocation of resources toward the market equilibrium.
b. moving the allocation of resources toward the socially optimal equilibrium.
c. increasing the allocation of resources.
d. decreasing the allocation of resources.
b
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If a perfectly competitive firm finds that it is producing an amount of output such that MR > MC and P > AVC, it will
A) leave the industry. B) decrease its output. C) increase its output. D) not change its behavior.
When a perfectly competitive market is in long-run equilibrium, each firm's price equals
a. both marginal cost and average total cost b. marginal cost, but exceeds average total cost c. marginal cost, but falls below average total cost d. average total cost, but exceeds marginal cost e. average total cost, but falls below marginal cost.
Use the graph to answer the following question:
Suppose the loanable funds market is initially in equilibrium at point A, but then implementation of fiscal policy causes crowding out to occur. After the implementation occurs, the equilibrium in the market would be best represented by
A. point A. B. point B. C. point C. D. point D.
The making and selling of a pencil for ten cents would likely NOT be possible, but for
A) relative advantage. B) the production possibilities curve. C) absolute advantage. D) the division of labor.