Which of the following is a characteristic of oligopoly?
A. marginal cost pricing
B. only a few firms in the industry
C. zero economic profits in the short run
D. mutual firm independence
Answer: B
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Explain the concept of moral hazard. Give an example
What will be an ideal response?
As a result of the pay-as-you-go nature of Social Security financing, the continuation of benefit payments is dependent upon _____
a. new individuals entering the system b. the current tax level c. current economic growth rates d. the Baby Boomer's decision on when to retire
If the elasticity of demand coefficient for a good is 6 (in absolute terms), we know:
a. that for every 1% increase in quantity, there will be a 6% increase in price. b. that for every 1% increase in quantity, there will be a 6% decrease in price. c. that for every 6% increase in quantity, there will be a 1% increase in price. d. that for every 6% increase in quantity, there will be a 1% decrease in price.
The equilibrium rent for marginal land
a. equals zero. b. depends on the supply and demand of land. c. exceeds the opportunity cost of the land. d. is always greater than the equilibrium rent for nonmarginal land.