Inefficiency exists in an economy when a good is
a. not being consumed by buyers who value it most highly.
b. not distributed fairly among buyers.
c. not produced because buyers do not value it very highly.
d. being produced with less than all available resources.
a
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One difference between stocks and bonds is that
A) stocks do not involve a promise to repay a purchaser of the stock, while bonds represent a promise to repay the purchase price of the bond. B) stocks represent ownership in companies, while bonds represent ownership in banks. C) stocks are financial securities, while bonds are labor market securities. D) stocks are usually issued in electronic form, while bonds are usually issued in paper form.
An incumbent's threat to use limit pricing if a firm enters the market
A) is credible if the firms have identical costs and market demand supports both firms. B) is credible if the firms have different costs and market demand won't support both firms. C) is not credible if the firms have different costs and market demand won't support both firms. D) is cheap talk, because the other firm will enter and the incumbent will still be able to charge monopoly pricing.
Once ABC Corp sells shares of stock to the public, the stock's price tends to
a. fluctuate inversely with the profit prospects of ABC Corp. b. fluctuate inversely with the dividend payout of ABC Corp. c. fluctuate directly with the dividend payout of ABC Corp. d. fluctuate directly with the profit prospects of ABC Corp. e. remain constant
The concept of economies of scale becomes especially relevant to international trade when it enables
a. numerous small producers to supply the entire country. b. one or two large producers to supply the entire country. c. numerous large producers to supply the entire country. d. one or two small producers to supply the entire country.