Which of the following statements is correct?
A. Monopoly firms tend to be more internally efficient than competitive firms because they have a single goal of profit maximization
B. Monopoly firms are sheltered from competitive forces and such an environment makes them subject to X-inefficiency
C. Monopoly firms are in industries with low barriers to entry that tend to lower the cost of producing products
D. Competitive firms tend to be more efficient than monopolist firms because they maximize per unit profits, not total profits
B. Monopoly firms are sheltered from competitive forces and such an environment makes them subject to X-inefficiency
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An increase in the marginal propensity to import will cause
A) the multiplier to increase and a given change in government spending (G) to have a larger effect on domestic output. B) the multiplier to increase and a given change in government spending (G) to have a smaller effect on domestic output. C) the multiplier to decrease and a given change in government spending (G) to have a larger effect on domestic output. D) the multiplier to decrease and a given change in government spending (G) to have a smaller effect on domestic output.
Economists say that since wants are unlimited and the earth contains a finite quantity of resources that people keep using,
a. we will run out of resources b. consumers will lose sovereignty c. the circular flow model will eventually shrink d. scarcity will always be a fact of economic life e. the ceteris paribus assumption becomes more universal