Figure 9-3
Suppose that U.S. tastes for British goods increase. Then, in
a.
the supply curve shifts from S1 to S2
b.
the supply curve shifts from S2 to S1
c.
the demand curve shifts from D2 to D1
d.
the demand curve shifts from D1 to D2
e.
both demand and supply shift to the right
d
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Writing in the New York Times on the technology boom of the late 1990s, Michael Lewis argues, "The sad truth, for investors, seems to be that most of the benefits of new technologies are passed right through to consumers free of charge"
What does Lewis means by the benefits of new technology being "passed right through to consumers free of charge"? A) In the long run, price equals the lowest possible average cost of production. In this sense, consumers receive the new technology "free of charge." B) Firms in perfect competition are price takers. Since they cannot influence price, they cannot dictate who benefits from new technologies, even if the benefits of new technology are being "passed right through to consumers free of charge." C) In perfect competition, price equals marginal cost of production. In this sense, consumers receive the new technology "free of charge." D) In perfect competition, consumers place a value on the good equal to its marginal cost of production and since they are willing to pay the marginal valuation of the good, they are essentially receiving the new technology "free of charge."
Rent-seeking behavior results in
a. increased economic activity by promoting efficiency. b. lower economic activity by diverting resource to less-productive uses. c. a more equitable distribution of income and wealth. d. lower prices throughout the economy. e. greater income and wealth in the private sector.