The explanation for the law of demand involves:
A. consumers' ability to substitute different goods.
B. the government's ability to set prices.
C. suppliers' ability to substitute inputs.
D. the market's ability to equate supply and demand.
Answer: A
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Suppose a new vaccine for Lyme disease is developed by Merck, a large drug company. Which of the following is most likely to occur?
A) Merck will apply for a patent on the vaccine that grants it the monopoly rights to the vaccine for many years. B) Merck will have a monopoly on this vaccine because of economies of scale. C) Other firms will quickly copy the formula making the market for the vaccine competitive. D) Merck will not tell anyone about its discovery though it will sell the vaccine.
The principal-agent problem:
A. is when the principal has more information than the agent. B. is when the agent is tempted to put in more effort than the principal would like. C. is commonly seen in the employer-employee relationship. D. is when the principal and agent have the same objectives.
There are some well-respected economists that believe we should substitute a national sales tax for the income tax. Other equally well-respected economists do not agree. What accounts for the difference in opinion? a. It might be over their interpretation of fairness. b. It might be over different modeling
c. Both (a) and (b). d. None of the above.
A firm that is operating at a loss may continue to operate for a while because of costs that it will still have to pay even if production ceases
a. True b. False Indicate whether the statement is true or false