When a positive externality exists, the market is said to fail because it overproduces the good associated with the positive externality.
Answer the following statement true (T) or false (F)
False
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For any competitive labor market, changes that increase the opportunity cost of work will:
A. increase the labor supply and shift the supply curve right. B. decrease the labor supply and shift the supply curve right. C. decrease the labor supply and shift the supply curve left. D. increase the labor supply and shift the supply curve left.
A permanent shift in the foreign exchange market supply and demand curves such that the fixed exchange rate is no longer an equilibrium rate is referred to as:
a. permanent devaluation. b. speculative disequilibrium. c. permanent revaluation. d. speculative equilibrium. e. fundamental disequilibrium.
Under the old Soviet version of communism in the U.S.S.R., the questions of 'What?', 'How?', and 'For whom?' were answered by
A. a democratically elected congress called the Duma. B. the law of supply and demand. C. the decisions of hundreds of millions of individual consumers. D. a government planning committee.
The Sweezy model of oligopoly reveals that:
A. perfectly competitive prices can arise in markets with only a few firms. B. capacity constraints are not important in determining market performance. C. changes in marginal cost may not affect prices. D. All of the statements associated with this question are correct.