Inefficiency in an economy can be caused by
A. misallocating resources.
B. underemploying resources.
C. discrimination.
D. All of the responses are correct.
Answer: D
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According to the circular flow diagram, in return for land, labor, capital and entrepreneurial ability, households receive _______________________________.
Fill in the blank(s) with the appropriate word(s).
The idea that individuals can reach an efficient equilibrium through private trades, even in the presence of an externality, is called:
A. market failure. B. trade quotas. C. the invisible hand. D. the Coase theorem.
A high rate of black male joblessness
A. has not existed since the Great Depression. B. has developed just since the 2001 recession and the subsequent "jobless recovery." C. has been very serious problem for at least a decade. D. never existed.
The imposition of tariffs on imports results in deadweight (triangle) losses. These are
A) production and consumption distortion effects. B) redistribution effects. C) revenue effects D) efficiency effects. E) distortion of incentives.