One reason why firms replace markets for some activities is that firms
A) reduce the number of transactions required.
B) enable individuals to avoid a large portion of their taxes.
C) reduce the rate at which the product is wasted.
D) do not require team production.
A
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Teaser interest rates refer to
A) the initial rates that are typically below market rate and are offered by lenders to entice the clients to borrow. B) mortgage rates. C) rates charged on all subprime mortgages. D) none of the above.
Total surplus
A) is maximized under perfect competition. B) represents the gains from trade to market participants. C) treats consumer and producer surplus equally. D) All of the above.
The perfectly competitive market structure results in economic efficiency because:
a. price is equal to marginal revenue in the short run. b. firms are producing at the minimum point of the average-total-cost curve in the short run. c. a normal profit is being earned in the long run. d. a normal profit is being earned in the short run. e. in the long-run, price is equal to marginal cost and minimum average-total-cost.
Which concept compares the share of total wealth in society that is received by different groups?
a. Income inequality b. Poverty line c. Poverty rate d. Financial distribution