Which of the following statements about market economies is correct?
a. In a market economy, no one is looking out for the economic well-being of society as a whole.
b. Market economies are characterized by decentralized decision making and self-interested decision makers.
c. Market economies have proven remarkably successful in promoting overall economic well-being.
d. All of the above are correct.
d
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Which of the following would cause both the equilibrium price and equilibrium quantity of barley (assume that barley is an inferior good) to increase?
A) a drought that sharply reduces barley output B) an increase in consumer income C) a decrease in consumer income D) unusually good weather that results in a bumper crop of barley
Suppose capital and labor are perfect substitutes resulting in a production function of q = K + L. That is, the isoquants are straight lines with a slope of -1
Derive the long-run total cost function TC = C(q) when the wage rate is w and the rental rate on capital is r.
There is no deadweight loss from a tax:
A. only if demand is perfectly elastic. B. only if supply is perfectly inelastic. C. if either demand or supply is perfectly elastic. D. if either demand or supply is perfectly inelastic.
For which of the following types of firm does the average revenue curve coincide with the marginal revenue curve?
a. A monopolist b. An oligopoly firm c. A monopolistically competitive firm d. A perfectly competitive firm e. A monopsonist