The market tends to underproduce public goods.
Answer the following statement true (T) or false (F)
True
The market mechanism leads to underproduction of public goods because everyone would wait for someone else to pay.
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When the price of a good is above its equilibrium price, a:
a. surplus puts upward pressure on the price. b. surplus puts downward pressure on the price. c. shortage puts upward pressure on the price. d. shortage puts downward pressure on the price.
Which one of the following describes the current state of economic development in the United States?
A. Employment is declining in the manufacturing sector and growing in the service sector. B. Employment is declining in the manufacturing sector and growing in the agricultural sector. C. The lack of well-defined property rights in the United States means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace. D. The United States is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth.
Which of the following models results in the greatest total profit, assuming a fixed number of firms with identical costs and a given demand curve?
A) Cournot B) Stackelberg C) Monopoly D) Perfect competition
The excess burden of a tax is $5,000 and the tax revenue from this tax is $15,000. The total burden of this tax is
A. $3,000. B. $5,000. C. $10,000. D. $20,000.