The Coase solution to the externality problem only works when bargaining costs are high
a. True
b. False
B
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The existence of international policy externalities provides an incentive for
A) strategic policy making. B) monetary autonomy. C) optimal currency areas. D) inflationary policy bias.
Sail Away is competing in the sailboat market with Best Sails. Sail Away drops its price below its cost and, in doing so, drives Best Sails out of the market. Once Sail Away is a monopoly, they raise their price and enjoy economic profit. This is an example of ________.
A) market division B) output restrictions C) resale price maintenance D) predatory pricing
Maximizing profits per unit always leads to the maximization of total profit.
Answer the following statement true (T) or false (F)
Suppose you are deciding whether or not to increase production. You are currently making a profit. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to less than that, and your average fixed costs will decrease. Finally, your average revenue will increase to $10, but your increase in revenue will be $9. You should
A. increase production by at least 1 unit. B. redo the math associated with decreasing production because that may result in greater profit. C. increase production by exactly 1 unit. D. leave production unchanged because profit is maximized where you are.