Which of the following will make price discrimination difficult for a monopolist?
A. a constant marginal cost curve
B. an increasing marginal cost
C. the possibility of resale of the product
D. a downward sloping demand curve
Answer: C
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Which of the following functions are performed by depository institutions?
I. They make long-term loans using short-term deposits, thereby creating liquidity. II. They efficiently gather funds from a large base of depositors. III. They concentrate risk. A) I only B) II only C) III only D) I and II
The real interest rate is
A) the nominal interest rate plus the anticipated inflation rate. B) the nominal interest rate minus the anticipated inflation rate. C) the nominal interest rate plus a COLA. D) the nominal interest rate plus the GDP deflator.
Suppose the U.S. Drug Enforcement Agency steps up its efforts to control the illegal importation of cocaine into the United States. What is the likely effect on the market for illegal drugs in the United States?
a. The price of cocaine and the quantity imported will both increase. b. The price of cocaine is likely increase and the quantity entering the country decrease. c. The price of marijuana, a cocaine substitute grown domestically, will fall. d. The policy will have the least impact on those individuals whose demand for drugs is elastic. e. Demand for drugs is highly inelastic and these policies have little or no effect on consumption.
The government giving the ownership of a pond to a citizen to reduce over fishing is a method to prevent _____
a. the free rider problem b. the tragedy of the commons c. asymmetric information d. deadweight loss