An increase in the inflation rate results in ________ in the quantity of real GDP demanded because a higher price level ________

Research has shown that most economic profits from selling a prescription drug are eliminated 20 years after the drug is first offered for sale. The main reason for the elimination of profits is

A) firms sell their patent rights to other firms so that they can concentrate on finding drugs to treat new illnesses. B) after 20 years patent protection is ended and other firms can produce less-expensive generic versions of the drug. C) the quantity demanded of the drug has increased enough that the demand becomes inelastic and revenue falls. D) after 20 years most people who have taken the drug have passed away or are cured of the illness the drug was intended to treat.

Which of the following statements is not true?

a. If marginal social cost and marginal private cost are the same, any externality that exists will be positive. b. If marginal externality costs are not zero, externalities exist. c. An expansion of property rights to include air quality and scenic beauty would bring some private markets close to a socially optimal equilibrium. d. The existence of pollution as the byproduct of a production or exchange process indicates a market failure. e. When municipal water supplies have heavy concentration of agricultural chemicals, it is probable that agricultural output from the area is produced in quantities greater than the socially optimal level.