Answer the following statement true (T) or false (F)
1) Supply-side market failures occur because it is impossible in certain cases for sellers to
charge consumers what they are willing to pay for a product.
2) When a supply-side market failure occurs, the costs are greater than the benefits for the last
unit(s) of output produced.
3) Along a demand curve, product price and consumer surplus are inversely related.
4) Along a supply curve, product price and producer surplus are inversely related.
1) F
2) T
3) T
4) F
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The figure above shows Sam's budget line. Which of the following equals the slope of Sam's budget line?
A) Y/Pc B) Y/Pg C) (Pc/Pg) D) (Pg/Pc)
The real business cycle model best explains the procyclicality of the nominal money supply by
A) an unpredictable Federal Reserve. B) exogenous money. C) endogenous money. D) uncorrelated money.
Which of the following will result as part of the interest rate effect when the price level rises? a. Households and firms increase their holdings of money
b. Interest rates will increase. c. A lower quantity of real GDP will be demanded. d. All of the above will result as part of the interest rate effect when the price level rises.
What is the poverty line in the United States based on?
a. The average purchasing power of a family of three b. The average standard of living in the United States c. Three times the cost of a nutritionally adequate diet d. The cost of housing and food in each state