The purchasing power of money decreases as the price level increases
Indicate whether the statement is true or false
TRUE
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Which of the following occur in the real world?
a. Neither market failures nor government failures b. Government failures but not market failures c. Market failures but not government failures d. Both market failures and government failures
When a country participates in international trade, its consumption possibilities
A. Always exceed its production possibilities. B. Must still equal its production possibilities. C. May increase, but its trading partners consumption possibilities will decrease. D. Will increase if it is a rich country and will decrease if it is a poor country.
A linear demand curve:
A. must be either perfectly inelastic or perfectly elastic. B. will be more elastic when price is low and more inelastic when price is high. C. has a constant elasticity. D. has a constant slope.
The Coase theorem will apply only if
A. the courts can be used to determine the amount of compensation that must be made to the damaged party. B. the number of people involved is small. C. the amount of compensation that must be made to the damaged party is small. D. an individual who is not affected by the externality can negotiate a settlement between the parties imposing the externality and the parties that are harmed by the externality.