Refer to Figure 3.1. If Marge confesses to the crime and Homer does not, what is Homer's payout?

Which of the following statements is TRUE?

A) Perfectly competitive markets are efficient, but monopoly markets never are efficient. B) Perfectly competitive markets always reach equilibrium but monopoly markets never reach equilibrium. C) Perfect price discriminating monopolists can eliminate all deadweight losses and achieve efficiency. D) All the above statements are true.

In a two-period model with production, an anticipated future increase in domestic total factor productivity

A) increases domestic output and increases the current account surplus. B) increases domestic output and decreases the current account surplus. C) has no effect on domestic output and increases the current account surplus. D) has no effect on domestic output and decreases the current account surplus.