Market clearing prices can be volatile in a market with inelastic demand and inelastic supply
Indicate whether the statement is true or false
T The intersection of demand and supply will not move far in the quantity dimension, but can move up and down considerably in the price dimension. See Figure 18.1.
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If a product becomes more popular and consumers want more produced, which of the following best describes what happens to move more factors of production into that industry?
A) An agency of the Federal government directs the movement of factors. B) The chief executive officers or presidents of corporations require that factors leave one industry and move to the other industry. C) Factor owners voluntarily move their factors because they want to satisfy the interests of consumers. D) Wages, rent, interest, and profit increase in that industry, thereby giving factors the incentive to move to that industry. E) Consumers increase their demand for the products and, as a result, the taxes the producers must pay decrease enabling the producers to hire more factors of production.
Consider a monopolistically competitive industry which is in long-run equilibrium. Which of the following is TRUE?
A) All firms charge a price equal to average total cost. B) All firms charge a price equal to marginal cost. C) All firms earn positive economic profit. D) Demand, average total cost, and marginal cost all intersect.
Which of the following countries does not come close to the free market benchmark?
A) Cuba B) Japan C) the United States D) France
Which statement is true?
A. William Julius Wilson and Charles Murray are basically in agreement about the causes of the formation of a permanent underclass. B. The permanent underclass has more white members than black members. C. There is very little evidence to show that there is actually a permanent underclass. D. There are more poor whites than poor blacks in the United States.