Inflation is:
a. a reduction in everyone's standard of living
b. a rise in the real prices of all goods and services.
c. a general and continuing rise in the money prices of goods and services.
d. a continuing rise in everyone's standard of living.
e. an increase in the value of money compared to the value of goods.
c
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The total value to society of having garbage removed is greater than the value of baseball games. Why, then, are baseball players paid more than garbage collectors?
A) Garbage removal results in significant external benefits that are not captured in the price paid for garbage removal. As a result, wages of garbage collectors do not reflect their social benefits. B) There is greater competition in the garbage collection industry than there is in Major League Baseball. C) Wages do not depend on total values but marginal values. The marginal revenue product of baseball players exceeds the marginal revenue product of garbage collectors. D) Although the total value of garbage removal is greater than the total value of baseball, wages are determined by average values.
In the long-run, monopolistically competitive firms:
A. charge prices equal to marginal cost. B. have excess capacity. C. produce at the minimum of average total cost. D. both B and C are true.
Normative economics deals with
a. social norms and customs that influence economic behavior b. norms of behavior that can be taken as facts c. statements of fact d. statements about the value of a proposed policy e. government rules and regulations that drag down the economy
Regulating firms so that they always receive a guaranteed profit rate will lead to greatest efficiency.
Answer the following statement true (T) or false (F)