Inefficiency occurs when an economy is operating outside its production possibilities curve.

A firm in monopolistic competition is

A) efficient because in the long run it earns zero economic profit. B) efficient because it produces at the minimum average total cost. C) inefficient because price exceeds marginal cost. D) efficient because of the ease of entry. E) efficient because it produces where MR = MC.

During business cycle expansions when income and wealth are rising, the demand for bonds ________ and the demand curve shifts to the ________, everything else held constant

A) falls; right B) falls; left C) rises; right D) rises; left