What do Wal-Mart, the Microsoft Corporation, and the Dell computer company have in common?
A) Each achieved a dominant position in its industry because it owned a key input in the production of its product.
B) The industry in which each firm competes is an oligopoly because of government-imposed barriers to entry.
C) Each company was founded in the same state.
D) The profitability of each firm depends on its interactions with other firms.
Ans: D) The profitability of each firm depends on its interactions with other firms.
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According to your text, the so-called "Superbowl Effect"
A) is an example of a mere statistical correlation. B) is an example of correct cause-and-effect reasoning. C) is a sound discovery in economic theory. D) is based upon a false set of facts.
Under a rule of reason approach, which of the following would be legal in the United States?
a. The merger of two small companies in an unconcentrated market. b. Price fixing between IBM and Compaq. c. The merger between Ford and General Motors. d. Kellogg's and General Mills collude to drive Quaker Oats out of the business. e. Exxon Oil and Mobil Oil elect the same person to their boards of directors.
A tax reduction shifts the consumption schedule downward.
Answer the following statement true (T) or false (F)
At the output level defining allocative efficiency:
A. the areas of consumer and producer surplus necessarily are equal. B. marginal benefit exceeds marginal cost by the greatest amount. C. consumer surplus exceeds producer surplus by the greatest amount. D. the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output.