Monopolists may in the long run
a. earn positive economic profit.
b. be protected by barriers to entry.
c. grow wealthy at the expense of their consumers.
d. All of the above are correct.
d
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Why might an automobile labor union lobby Congress to place tariffs on labor-saving devices like automated welding and riveting machines? Why might this be a mistake?
What will be an ideal response?
Which of the following is an application of the adverse-selection problem?
a. a customer driving more recklessly after buying car insurance. b. a teenager "hanging out" with friends his or her parents do not approve of. c. shareholders offering a high-powered incentive contract to a manager. d. an auto repairman claiming that the repairs are more extensive than they actually are.
A budget deficit is the:
A. amount of money a government spends beyond the net revenue it brings in. B. amount of net revenue a government brings in beyond what it spends. C. total amount of money that a government owes. D. total amount of money that a government spends for discretionary policies.
Briefly explain how command-and-control regulation works