What are the reasons for preferring competition to monopoly?
Monopolists sell at too high a price and provide too small a quantity to be efficient, whereas competitive firms operate efficiently in the long run. Efficiency requires MU = MC. For monopoly, MU = P, as with perfect competition, but P is greater than MC, meaning that MU is greater than marginal cost. This means that an expansion of output will yield utility to consumers that is greater than the cost.
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A lump-sum tax, such as a $1000 tax that every family must pay one time, is
A) negatively related to real GDP. B) an autonomous tax. C) a regressive tax. D) a type of income tax.
Refer to the Article Summary. How would the NFL know if it was operating on the elastic portion of the demand curve for Super Bowl tickets?
A) If they decreased ticket prices and the total revenue from ticket sales did not change. B) If they increased ticket prices and the total revenue from ticket sales decreased. C) If they increased ticket prices and the total revenue from ticket sales increased. D) If they increased ticket prices and the total revenue from ticket sales did not change.
The best explanation for the rapid rise in skilled wages relative to unskilled wages in antebellum U.S. is:
a. The demand for unskilled labor fell while the demand for skilled labor increased. b. The supply for unskilled labor increased and the supply for skilled labor remained the same. c. While both the supply and demand for skilled and unskilled labor grew during the period, the supply of unskilled labor grew relative to the supply of skilled labor. d. The supply and demand for skilled labor increased while both decreased for unskilled labor.
It is possible to charge a price for a pure public good.
Answer the following statement true (T) or false (F)