Market failures
A) prevent the price system from attaining economic efficiency.
B) result in quantities and prices that are socially desirable.
C) strengthen economic efficiency by forcing unprofitable firms to close.
D) weaken the argument for government intervention in the economy.
Answer: A
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Which of the following is true if a nation's official money fails to serve as a medium of exchange? a. Nothing will replace money to help facilitate exchange. b. There will be an increase in economic efficiency
c. Resources will divert from production to exchange. d. Transactions costs of exchange will decrease. e. Fewer barter exchanges will be completed.
The long-run market supply curve in a competitive market will
a. always be horizontal. b. be the portion of the MC that lies above the minimum of AVC for the marginal firm. c. typically be more elastic than the short-run supply curve. d. be above the competitive firm's efficient scale.