What are the pros and cons of a competitive market in the long run?
The pros include price equals minimum average total costs and marginal cost. Also, only a normal profit is earned in the long run. The major drawback of a competitive market is that it usually does not promote technological advances (because competitive firms do not earn the profits necessary to enable long-term investments in research and development).
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Which of the following assertions about pollution is generally agreed with by economists?
A) Pollution is never a problem because those who pollute and the victims of pollution can always bargain with one another and arrive at a suitable outcome. B) Due to the demand for products made by those who pollute, it is best to not restrict pollution. C) The problem we face in dealing with pollution is determining the optimal amount of pollution. D) The ideal amount of pollution is no pollution.
Using Figure 1.6, we know the production of 130 units of soda and 1 unit of pizza is 
A. impossible because we have the technology but do not have the resources. B. possible, but there would be unemployed resources. C. possible, but only if all resources were fully employed. D. impossible because we have the resources but do not have the technology.