The inflation rate measures the average prices of goods and services in the economy
Indicate whether the statement is true or false
FALSE
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Since price tends to equal total utility, the price of water is low and the price of diamonds is high.
Answer the following statement true (T) or false (F)
If a 10 percent increase in price leads to a 20 percent increase in the quantity supplied, then the elasticity of supply is 0.5
a. True b. False Indicate whether the statement is true or false
If a monopolistically competitive firm engages in a successful advertising campaign resulting in above positive economic profits then in the long run that firm will
a. continue to earn positive economic profits because successful advertising is one of the barriers to entry b. earn zero economic profits because the government will begin to regulate the industry c. earn negative economic profits because it won't be able to advertise indefinitely d. earn zero economic profits because other firms will also begin to advertise e. continue to earn positive economic profits because most monopolistically competitive firms can earn economic profits in the long run
A pollution compensation tax is chosen to
a. keep output stable while reducing pollution b. increase output in a cleaner manner c. make all users pay the same amount of tax d. drive the polluting firms out of business in the long run e. create enough government revenue to clean up the environment