As one moves down along a linear demand curve (i.e., from high price, low quantity pairs to low price, high quantity pairs), demand:
A. decreases.
B. becomes less elastic.
C. increases.
D. becomes more elastic.
Answer: B
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A negative externality can be internalized by
A. persuasion. B. the imposition of a tax. C. the assignment of property rights. D. a voluntary agreement. E. all of the above
Perfectly competitive firms are price takers because
a. each firm is too small compared to the market to be able to affect price b. one firm determines price and all other firms accept this price c. firms take the price that government determines d. firms must accept any price consumers offer them e. firms earn high profits by "taking" consumers
A perfectly competitive firm breaks even at a price equal to its minimum average total cost
Indicate whether the statement is true or false
To avoid double counting in the calculation of GDP,
a. net exports should be excluded. b. the value of intermediate goods and services should be excluded. c. the capital consumption allowance should be excluded. d. business investment should be excluded. e. government purchases should be excluded.