A transaction with negative externalities will result in _____
a. overproduction
b. underproduction
c. maximization of net social welfare
d. the true cost being borne by the participants in the transaction
a
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Which of the following describes a situation in which demand must be inelastic? a. Total revenue decreases by 10 percent when the price of spats rises by 10 percent. b. Total revenue decreases by less than 10 percent when the price of spats rises by 10 percent
c. Total revenue increases by more than 10 percent when the price of spats rises by 10 percent. d. Total revenue decreases by $10 when the price of spats rises by $10. e. Total revenue decreases by more than $10 when the price of spats rises by $10.
All of the following are true regarding flexible exchange rates except
A. Speculators typically push exchange rates away from the long-term equilibrium. B. Exchange rate movements alter relative prices and may disrupt import and export flows. C. The quantity of foreign exchange demanded equals the quantity supplied. D. Some people are hurt while others are helped by exchange rate movements.
A situation in which there is a reduction in quantity supplied to zero when there is the slightest decrease in price is
A) perfectly elastic supply. B) perfectly elastic demand. C) perfectly inelastic supply. D) perfectly inelastic demand.
A firm's total product curve shows
A) that inefficiency is not possible. B) how the cost of the fixed resources change when output changes. C) how the amount of output changes when the quantity of labor changes. D) that in the long run the firm must adjust the quantity of all the resources it employs.