Markets can fail to achieve efficiency when
a. there are prices consumers do not think are fair.
b. there are wages workers do not think are fair.
c. trade puts people out of work.
d. there are public goods.
d
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Suppose we plot the total revenue curve with quantity on the horizontal axis and revenue on the vertical axis (as in Figure 8.1 in the book). Under price-taking behavior, the total revenue curve should be:
A) an inverted U-shaped curve (first increasing and then decreasing). B) a U-shaped curve (first decreasing and then increasing). C) a horizontal line with vertical axis intercept equal to the market price. D) a straight line from the origin with slope equal to the market price.
Alternate Outputs from One Day's Labor Input:
USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles. From the data, the USA: a. has an absolute advantage over India in the production of textiles. b. has an absolute advantage over India in the production of wheat. c. has a comparative advantage in the production of textiles. d. should export textiles to India.