In the above figure, if no government intervention occurs, at the unregulated competitive market equilibrium, the marginal cost of the externality is ________ per unit
A) $3
B) $4
C) $6
D) $7
A
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An assumption behind the infant-industry argument for tariff protection is that
A) foreign competitors are selling output below average cost. B) the domestic industry will be facing an upward adjustment in its average cost. C) the domestic industry will eventually gain a comparative advantage in producing the good. D) the market needs additional competition to satisfy consumer demand.
The measure of market power that focuses on the share of the market controlled by the X largest firms in the market is known as:
A) the Lerner Index. B) the Herfindahl-Hirschman Index. C) the Minimum-Efficient Scale Index. D) a concentration ratio.
Assume that a low-wage contract is in force in the society, and the central bank follows a low-money-growth policy. Which of the following will be observed?
a. The actual inflation rate will match the low rate that people had expected. b. The actual inflation rate will be higher than the natural rate. c. The actual inflation rate will be higher than the low rate that people had expected. d. The actual inflation rate will be lower than the high rate that people had expected. e. The unemployment rate will be lower than the natural rate.
In order to fit linear supply and demand curves to data, we need to find the parameters, a, b, c, and d, of the corresponding functions.
A.One procedure for finding those values uses the known values of: the price elasticity of demand and supply and the income elasticity of demand. B. the price and quantity of equilibrium and the elasticities of supply and demand. C. any two known values of price and quantity and income elasticity of demand. D. the demand equation and income elasticity of demand.