Why does our government enforce antitrust legislation?
A) because monopolies are known to be unfair to their stockholders
B) because monopolies are known to be unfair to their employees
C) because the government wants to create competition in markets in the interests of promoting efficiency
D) because the government wants to create competition in markets in the interests of promoting an equal distribution of income
C
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Consider a society consisting of just a farmer and a tailor. The farmer has 10 units of food but no clothing. The tailor has 20 units of clothing but no food. Suppose each has the utility function U = F ? C. Derive the contract curve
What will be an ideal response?
Imposition of an output tax on all firms in a competitive industry will result in
A) a downward shift in each firm's marginal cost curve. B) a downward shift in each firm's average cost curve. C) a leftward shift in the market supply curve. D) the entry of new firms into the industry. E) higher profits for the industry as price rises.
The height of the demand curve for a product indicates the
a. minimum price consumers are willing to pay for an additional unit of it. b. minimum quantity consumers are willing to purchase at the current price. c. maximum price consumers are willing to pay for an additional unit of it. d. minimum price required to induce suppliers to produce an additional unit of it.
Normative economic analysis involves
A. value judgments. B. positive analysis. C. if-then statements. D. objective descriptions of the way things are.