An economic model should capture
A. variables that are not related.
B. all possible variables that apply to the problem.
C. all information in the world.
D. the essential relationships that help to analyze the problem.
Answer: D
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If supply and demand both increase, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. uncertain; higher B. higher; higher C. lower; lower D. lower; uncertain
From the late 1930s until the early 1970s, courts tended to follow per se rules when deciding antitrust cases. According to these rules,
a. a firm's control of a large market share was considered intrinsically illegal. b. the existence of only one or two firms in an industry was not necessarily an antitrust violation. c. both market share and predatory practices must be considered in determining whether a firm had violated the law. d. the court should only intervene if the firm charged "unfair" prices.
At all quantities, the demand curve for a monopolist generally
A. is steeper than the marginal revenue curve. B. lies below the marginal revenue curve. C. is the same as the marginal revenue curve. D. lies above the marginal revenue curve.
An excise tax of $1.00 per gallon of gasoline placed on the suppliers of gasoline in a market with downward sloping demand and upward sloping supply would raise the equilibrium price
A. by less than $1.00 per gallon. B. exactly $1.00 per gallon. C. by more than $1.00 per gallon. D. too little information to determine the impact on the equilibrium price.