One company has 90% of the market for cola soft drinks. An antitrust action against this company is likely to be defended (by the company) by the argument that
A. there is no substitute for cola soft drinks.
B. the market share is not important.
C. the relevant market is for cola soft drinks.
D. the relevant market is not that for cola soft drinks but for all soft drinks.
D. the relevant market is not that for cola soft drinks but for all soft drinks.
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Larry Krovitz is a salesman who works at a used-car showroom in Sydney, Australia. It's the last week of July but he is yet to meet his sales target for the month. A customer, Harold Kumar, who wants to buy a Ford Fiesta, walks in to the showroom
After taking one of the cars for a test drive, Harold decides to buy it. While $11,000 was the least that Larry would have been willing to accept for that car, he quotes a price of $15,000 . After some bargaining, the car is sold for $12,000 . a. What is the producer surplus in this case? b. If Larry bought the car for $8,000, what is his profit? c. Is producer surplus always equal to profit? Explain your answer.
Special-interest groups have little incentive to
a. earn profits b. redistribute wealth c. lobby Congress d. make the economy more efficient e. seek regulation beneficial to them
The idea behind the "Big Mac index" is a test of
a. interest rate parity theory. b. long-run equilibrium theory. c. purchasing power parity theory. d. exchange rate equalization theory.
Many external costs occur because
a. people do not pay the true cost of using a resource. b. people do not pay the private cost of using a resource. c. companies do not pay the market price for natural resources. d. companies pay more than the true cost of using a resource.