The cycle of increased market demand that leads to ________ and then a(n) ________ in market price has caused many firms bankruptcy.
A) overexpansion; increase
B) underexpansion; increase
C) underexpansion; decrease
D) overexpansion; decrease
D) overexpansion; decrease
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According to the law of supply:
A. producers are willing to supply larger amounts of a good as its price increases. B. a direct relationship exists between the price of a good and the amount buyers choose to buy. C. an inverse relationship exists between the price of a good and the amount buyers wish to buy. D. an inverse relationship exists between the price of a good and the amount producers supply.
In a financial market where information is symmetric:
A. there would be no adverse selection. B. the ability to obtain information is available to only one party. C. there would be moral hazard. D. one party to a transaction knows information the other party does not.
In a natural monopoly, throughout the range of market demand,
a. marginal cost exceeds average cost and therefore pulls average cost upward b. average cost exceeds marginal cost and therefore pulls marginal cost upward c. marginal cost is below average cost and therefore pulls average cost downward d. average cost is equal to marginal cost e. there are diseconomies of scale
Figure 7-1
In Figure 7-1, which graph best represents total physical product with diminishing returns?
a.
1
b.
2
c.
3
d.
4