The reason externalities distort the allocation of resources is that:
a. too few goods are usually produced.
b. firms often go out of business because of the externality.
c. a firm's private costs do not reflect the social cost of production.
d. regulating externalities uses scarce resources.
c
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Frictional unemployment includes
A) unemployment caused by normal labor turnover associated with people leaving and entering the labor force. B) unemployment caused by industries moving overseas to better meet foreign competition. C) unemployment caused by a lack of education so that workers do not possess necessary job skills. D) unemployment caused by automation of the work place that displaces unskilled workers.
The owner of a firm wants some advice on how to increase productivity. Suggest three ways the entrepreneur could increase labor productivity through improving technology
What will be an ideal response?
An increase in demand will increase the quantity sold but not the price in a market if:
a. supply is perfectly elastic b. supply is perfectly inelastic c. supply is relatively elastic d. supply is relatively inelastic
The entry of new firms into a market will
a. increase the market demand curve b. make the existing firms' demand curves more elastic c. make the market demand curve less elastic d. shift the firm's demand curve to the right e. shift the market supply to the right