A competitive, unregulated market would
A) produce too much pollution because pollution is an external cost.
B) produce too little education because education has an external benefit.
C) fail to achieve equilibrium if there are externalities present.
D) Both answers A and B are correct.
E) Both answers B and C are correct.
D
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The short-run break-even price
A) is the price at which the firm's current liabilities are paid off. B) is the price at which a firm's total revenues equal total costs. C) occurs at the output at which the firm yields a below normal rate of return. D) occurs at the output at which the firm yields a positive economic profit.
What is the main cause of high inflation rates in middle and low income countries?
a. Citizens save most of their income lowering aggregate demand. b. Citizens spend most of their income pushing up prices. c. The government pays for its budget deficits by printing money. d. The government pays for its budget surplus by printing money.
Historically, the market prices of most natural resources (adjusted for inflation) have
a. increased. b. remained stable. c. remained stable or decreased. d. decreased.
An oligopolist charges a lower price than the short-run profit-maximizing price. Which newcomers would this action most likely stop from entering the market?
a. those with costs higher than P 1
b. those with costs at P 1
c. those with costs between 0 and P 1
d. those with costs less than ATC