A decrease in the market price of a product will reduce producer surplus because new producers will enter the market
a. True
b. False
Indicate whether the statement is true or false
False
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The effects of a change in government purchases is multiplied throughout an economy...
What will be an ideal response?
If firms have to account for external costs in production, then they will produce an output level that is ________ the efficient level.
A. above B. at C. either above or below D. below
Refer to the diagram in which S is the market supply curve and S 1 is a supply curve comprising all costs of production, including external costs. Assume that the number of people affected by these external costs is large. Without government
interference, this market will reach:
A. an optimal allocation of society's resources.
B. an underallocation of resources to this product.
C. an overallocation of resources to this product.
D. a higher price than is consistent with an optimal allocation of resources.
The fact that some people can afford to live in beautiful homes while others are homeless, is most directly an example of an economy facing the ________ part of one of the two big economic questions
A) "for whom" B) "when" C) "how" D) "why"