To correct a market failure, society typically relies on
a. the market to correct itself
b. individual producers' cost-minimization procedures
c. the industry policing itself
d. the government to either tax, subsidize, or control output directly
e. price to reach equilibrium
D
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What does the Law of Supply state? What is the key feature of a typical supply curve?
What will be an ideal response?
An increase in deductions, exemptions, and credits in the tax code will
A. Induce economic activity to go underground. B. Reduce the tax base. C. Allow lower rates to raise the same tax revenues. D. Increase the marginal tax rate.
In a December 2007 New York Times column Paul Krugman argued in favor of
a. protectionism based on the national-security argument. b. protectionism based on the infant-industry argument. c. protectionism based on the unfair-competition argument. d. keeping world markets relatively open.
When more firms enter an industry:
A. the amount produced by each of the new firms will be less than the amount produced by each of the original firms. B. the industry supply curve will shift right. C. the industry supply curve will shift left. D. the amount produced by each of the new firms will be greater than the amount produced by each of the original firms.