Refer to Figure 5-3. In the absence of any government intervention, the private market
A) underproduces by Qo - Qm units. B) underproduces by Qn - Qm units.
C) overproduces by Qn - Qm units. D) overproduces by Qo - Qm units.
B
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According to the Keynesian fixed wage theory, real wages should be
a. positively correlated with income. b. not correlated with income. c. fixed. d. negatively correlated with income.
If a firm can earn a profit stream of $50,000 per year for 10 years, that profit stream is worth
A) more than $500,000 today. B) $500,000 today. C) less than $500,000 today, but a positive amount. D) nothing today E) some amount, but whether it is more, less or the same as $500,000 cannot be determined.
The law of diminishing marginal utility suggests that a demand curve: a. shows a direct relationship between price and quantity demanded. b. has a slope equal to zero
c. has a positive slope. d. has a negative slope.
Which of the following is false? a. Market prices signal the relative availability of products to buyers
b. Market prices signal the relative value consumers place on products to sellers. c. The information and incentives offered by market price adjustments provide the "invisible hand" toward socially desirable cooperation between consumers and producers. d. None of the above are false; all are true.