In perfectly competitive markets, economic profits
A. send a signal to other producers to enter the market.
B. will decrease the industry supply curve.
C. could also be called explicit costs.
D. will increase the industry demand curve.
A. send a signal to other producers to enter the market.
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The price elasticity of supply is calculated as the
A) percentage change in quantity supplied multiplied by the percentage change in price. B) percentage change in quantity supplied divided by the percentage change in price. C) percentage change in price divided by the percentage change in quantity supplied. D) percentage change in quantity supplied plus the percentage change in price.
If the supply curve is perfectly inelastic and the demand curve is a downward sloping straight line, what is the effect of a consumer ad valorem tax on equilibrium price and quantity?
A) Price remains unchanged and quantity increases. B) Price decreases and quantity increases. C) Price decreases and quantity remains unchanged. D) Price and quantity decrease.
A negative externality will cause a private market to produce
a. less than is socially desirable. b. more than is socially desirable. c. exactly the quantity that is socially desirable. d. less than the same market would produce in the presence of a positive externality.
To state that public saving is equal to investment, for a closed economy, is to state an accounting identity
a. True b. False Indicate whether the statement is true or false