A decreasing-cost industry will have
A. a downward sloping supply curve in the long run.
B. an upward sloping demand curve in the long run.
C. a perfectly inelastic long-run supply curve.
D. a perfectly elastic long-run supply curve.
Answer: A
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All else constant, an increase in the level of competition among firms would be expected to reduce the amount of X-inefficiency that exists in a particular industry
Indicate whether the statement is true or false
Which of the following "quotations", according to chapter 23, best summarizes Keynes conclusions about the lessons of the depression for the nature of capitalism?
a. "It is in determining the volume, not the direction, of actual employment that the existing system has broken down.". b. "An economic system that forgets to find work for millions of men and women, cannot be trusted to perform any task in an intelligent fashion.". c. "The depression is essentially a problem of reliance on a private banking system for the provision of an inherently public good, money.". d. "The rules of sound finance, namely stable prices and balanced budgets, apply as much to the present crisis, as they do in more pleasant times.".
For a given market demand curve, if the market clearing price increases, then the amount of consumer surplus will
A. decrease. B. become negative. C. increase. D. None of these due to insufficient information.
The difference between producer surplus and profit is always the associated with
A) opportunity costs. B) total costs. C) variable costs. D) fixed costs.