Refer to the figure above. Social surplus can be increased by ________
A) increasing output above 13 million units
B) reducing output below 13 million units
C) increasing the price above $22
D) charging a price of $22
A
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In the long-run, if firms in a perfectly competitive market are incurring persistent economic losses, some firms will
A) exit and the price will fall. B) exit and the price will rise. C) enter and the price might either rise or fall. D) exit and the price might either rise or fall.
Game theory is based on the idea that
a. government determines the rules of the game b. firms are strategically independent c. firms are price takers d. a player's strategy must take account of the strategies followed by other players e. a player's strategy must be independent of the strategies followed by other players
If the economy relies entirely on the market mechanism to answer the WHAT, HOW, and FOR WHOM questions, it tends to
A. Overproduce goods that yield external benefits and underproduce those that generate external costs. B. Underproduce goods that yield external benefits and overproduce those that generate external costs. C. Overproduce goods that yield external benefits and overproduce those that generate external costs. D. Underproduce goods that yield external benefits and underproduce those that generate external costs.
Free trade
A. hurts economic growth because foreign countries can produce goods with lower labor costs. B. hurts economic growth because foreigners are not bound by the same patent laws as we are. C. helps economic growth by increasing tariffs. D. helps economic growth by encouraging the sharing of technology and industrial ideas.