Government intervention may achieve a more optimal outcome than the market mechanism when addressing
A. Consumption of cigarettes.
B. Inefficient bureaucracy.
C. The supply of new hot dog stands.
D. None of the choices are correct.
Answer: A
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Suppose a monopoly has constant marginal costs of $40 per unit. Demand for the monopolist’s product is Q = 100 - 0.5P.
i. What are the profit maximizing price and quantity for this monopoly? Explain how you arrived at your answer. ii. How many units of the product would the competitive market supply? What would the equilibrium price be? Explain how you arrived at your answer. iii. Calculate how much consumer surplus would be lost if this market started off as perfectly competitive but then became monopolistic. iv. Calculate how much producer surplus would be gained if this market started off as perfectly competitive but then became monopolistic. v. Briefly explain how your answers to parts iii and iv relate to the deadweight loss created by the monopoly.
Which of the following World War I (1914–18) institutions reappeared in various forms during the Great Depression and/or World War II (1941–45)?
(a) The U.S. Grain Corporation (b) The War Industries Board (c) The United States Housing Corporation (d) All of the above
Describe in general terms four or five characteristics of less-developed countries
If price increases by 10 percent and a firm is maximizing profits, output will
a. increase by 10 percent b. decrease by 10 percent c. remain unchanged d. increase, but we don't know by how much e. decrease, but we don't know by how much