Which of the following statements about market failure is not true:
A. Market failure causes an inefficient allocation of resources, even in a competitive market
B. Market failure can come from causes on the demand-side or the supply-side of a market
C. Market failure always results from some government action or policy in a market
D. Market failure can result from the number of sellers in a market being too few to ensure competition
C. Market failure always results from some government action or policy in a market
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A depreciating domestic currency is often perceived to be a sign of a(n):
A) economic expansion. B) strong government. C) weak government. D) global slowdown.
Budget deficits are important because deficits
A) cause bank failures. B) always cause interest rates to fall. C) can result in higher rates of monetary growth. D) always cause prices to fall.
Which of the following situations is represented by a nearly horizontal supply curve for a good?
a. Small price changes lead to small changes in quantity demanded of the good. b. Small price changes lead to small changes in quantity supplied of the good. c. Producers of the good are not operating efficiently. d. Producers of the good are not maximizing profit. e. Small changes in the price of the good lead to large changes in the quantity supplied of the good.
In order for a natural monopoly to develop, it
a. is important that the firm be very large. b. is important that the firm prices its product below cost. c. is not the absolute size of the firm but its size relative to the total market demand that is important. d. must be in the presence of government intervention.