(Last Word) In their effort to provide disaster relief after Hurricane Katrina, the Federal Emergency Management Agency (FEMA) made payouts on as many as 900,000 claims with invalid Social Security numbers or false names and addresses. This example
illustrates:
A. the benefits-received principle.
B. logrolling.
C. bureaucratic inefficiency.
D. the problem of limited and bundled choices.
Answer: C
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An example of vertical foreclosure is when a firm:
A. merges with a rival firm with the intention of eliminating the rival firm's product from the market. B. merges with a rival firm with the intention of eliminating the rival firm's product from the market and that controls an essential upstream input refuses to sell to other downstream firms that need the input. C. temporarily prices below its marginal cost to close competitors out of the market. D. that controls an essential upstream input refuses to sell to other downstream firms that need the input.
A firm has a marginal cost of $20 and charges a price of $40. The Lerner index for this firm is:
A. 0.33. B. 0.50. C. 0.20. D. 0.75.
In general, perfectly competitive firms maximize their profit by producing the level of output at which:
A. total cost is minimized. B. total cost equals total revenue. C. marginal cost is minimized. D. marginal cost equals price.
Under the Exchange Rate Mechanism of the European Monetary System, when the German mark depreciated below its lower limit against the British pound, the Bank of England was required to buy ________ and sell ________,
thereby ________ international reserves. A) pounds; marks; losing B) pounds; marks; gaining C) marks; pounds; gaining D) marks; pounds; losing