The basic difference between macroeconomics and microeconomics is that
a. microeconomics is concerned with aggregate markets and the entire economy, while macroeconomics is concerned with specific individual markets.
b. macroeconomics is concerned with policy decisions, while microeconomics applies only to theory.
c. microeconomics is concerned with individual markets and the behavior of people and firms, while macroeconomics is concerned with aggregate markets and the entire economy.
d. macroeconomics is concerned with positive economics, while microeconomics is concerned with normative economics.
C
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What type of policies did Adam Smith attack in his book, An Inquiry into the Nature and Causes of the Wealth of Nations?
What will be an ideal response?
The fact that barriers to entry are low in competitive price-searcher markets means that if current firms are making economic losses,
a. these losses will remain in the long run because no firms can exit the market. b. current firms will exit the market, causing the demand curves that face the remaining firms to increase. c. new firms will enter the market, causing the demand curves that face the existing firms to decrease. d. new firms will enter the market, causing no change in the demand curves that face the existing firms in the market.
Which of the following statements is not correct?
a. Government policies may improve the market's allocation of resources when negative externalities are present. b. Government policies may improve the market's allocation of resources when positive externalities are present. c. A positive externality is an example of a market failure. d. Without government intervention, the market will tend to undersupply products that produce negative externalities.
If the firm were a perfect competitor, how much would its price be in the long run?
