One cause of market failure may be the absence of clearly defined property rights
a. True
b. False
Indicate whether the statement is true or false
True
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If a chemical factory causes noxious fumes to be emitted in the neighborhood, a likely third party would be
a. workers at the factory b. factory managers c. chemical customers d. neighborhood homeowners and their families e. owners of the factory
If we were to compare the monopolistically competitive firm's long-run outcome to that of a perfectly competitive one, we would conclude that the monopolistically competitive firm:
A. earns the same profit as a perfectly competitive firm. B. creates less consumer surplus. C. produces more output. D. All of these statements are true.
As China's auto production capability has evolved, it is unclear whether protection was beneficial or harmful. Why?
a. Accounting data must be translated from Chinese to English, and that is a difficult task. b. After 30 years of infant industry protection, the tariff on auto imports is still significant (a 25% tariff). c. China will probably never achieve exports, so whether any gains were made is unclear. d. Chinese consumers are exerting more market power, and they are opposed to any kind of import protection.
When a country occasionally buys or sells currencies to influence the exchange rate, but usually lets market forces determine the exchange rate, it has a:
A. fixed exchange rate. B. partially-flexible exchange rate. C. flexible exchange rate. D. gold standard.