Which of the following statements about perfectly competitive markets is not correct?
a. In the short run, firms can earn economic profits or suffer economic losses.
b. The market demand curve is downward sloping.
c. The demand curve facing an individual firm is perfectly elastic.
d. In the long run, firms can earn economic profits or suffer economic losses.
e. In the long run, firms can enter or exit the market.
D
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The higher the nominal interest rate, the
A) greater the opportunity cost of holding money. B) lower the quantity of money demanded. C) more the demand for money curve shifts leftward. D) Both answers A and B are correct.
The best test of an economic theory is: a. the rigor of its mathematical formulation. b. its ability to explain and predict
c. the accuracy of its assumptions. d. the level of real-world detail it captures.
Which of the following statements best defines private costs?
A. They are costs borne by people other than those who commit the action. B. They are synonymous with social costs. C. They are internal in the sense that the buyer or seller must explicitly take them into account. D. They represent explicit costs incurred by producers in the private sector.
The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. What is the marginal social benefit from the 100th pound of chocolate each day?
A) $1.50 per pound B) $1.00 per pound C) $0.50 per pound D) None of the above answers is correct.