In the ________________ of externalities, the market equilibrium is ______________ efficient because it maximizes the net social benefit.
a. absence; ecologically
b. presence; ecologically
c. absence; economically
d. presence; economically
e. absence; environmentally
Ans: c. absence; economically
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The original mission of the World Bank was to
A) provide capital to underdeveloped countries. B) provide capital to firms around the world. C) provide financial assistance for the reconstruction of war-damaged nations. D) provide a safe place for people around the world to put their money. E) help countries manage their exchange rates.
A purely competitive firm is in short-run equilibrium and its MC exceeds its ATC. It can be concluded that:
A. this is an increasing-cost industry. B. the firm is realizing a loss. C. the firm is realizing an economic profit. D. firms will leave the industry in the long run.