The government sometimes provides public goods because
a. private markets are incapable of producing public goods.
b. free-riders make it difficult for private markets to supply the efficient quantity.
c. markets are always better off with some government oversight.
d. external benefits will accrue to private producers.
B
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Suppose that the long-run industry supply in the production of synthetic fabrics is perfectly elastic. Which of the following statements is then true?
a. The marginal cost curve of each synthetic-producing firm is horizontal. b. The existence of profit within the industry will not draw new firms into the market. c. The long-run industry supply for synthetics is horizontal. d. The long-run industry supply for synthetics is upward sloping.
A relationship between two variables in which one variable increases at the same time as the other decreases is called
A) nonlinear. B) constant. C) inverse. D) direct.