Answer the following questions true (T) or false (F)
1. Market equilibrium occurs where the quantity supplied is equal to the quantity demanded.
2. If the demand for a product increases and the supply of the same product increases, the equilibrium price will increase.
3. As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise.
1. TRUE
2. FALSE
3. TRUE
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In markets free from intervention, prices tend to move towards equilibrium because of
A) the "helping hand" of government. B) increased demand from buyers. C) increased supply by sellers. D) the unintended consequences of choices among buyers and sellers pursuing their own plans.
Which of the following are devices that the government uses to achieve a more efficient allocation of resources in the presence of external benefits?
A) taxes, private subsidies, and regulation B) public provision, taxes, and private subsidies C) regulations, public provision, and vouchers D) vouchers, public provision, and private subsidies E) public provision, taxes, and vouchers
What is the distinction between external and internal economies and diseconomies of scale in an industry?
What will be an ideal response?
Refer to the above figures. Which of the panels would be consistent with the situation in which external costs exist?
A) Panel 1 B) Panel 2 C) Panels 1 and 2 D) neither panel