According to the theory of efficiency wages, firms operate more efficiently if wages are above the equilibrium level
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 30,000 units
A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. B) producers should raise the price to $3 in order to sell the quantity demanded of 30,000. C) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently high. D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
One necessary condition for effective price discrimination is:
a. identical tastes among buyers. b. difference in the price elasticity of demand among buyers. c. a single, homogeneous market. d. two or more markets with easy resale of products between them.
Suppose that Sweden imposes a retail disposal charge on household batteries. To assure that allocative efficiency is achieved, this charge should be set equal to
Use the following forany or all of Questions 11 through 13 below. Consider the following model of the municipal solid waste (MSW) services market in the city of Houston. MSC = 1.5 + 1.25Q MSB = 30 – 2.5Q MEC= 0.75Q MEB= 0 whereQ is the number of trash containers serviced per household per month. a. the vertical distance between MSB and MPB at QC b. the marginal social benefit at QE c. the MPC associated with battery production d. the ?MEB at the efficient equilibrium
The lime drinks industry and the cola drinks industry are both operating as oligopolies. The two firms in the lime drinks industry agree to form a cartel, while the three firms in the cola drinks industry are unable to come to an agreement. In the given scenario, which of the following statements is true?
a. The producers of lime drinks will share monopoly profits, while the producers of cola drinks will have profit levels typical of competition. b. The producers of lime drinks will have the profit levels of monopolistic competitors, while the producers of cola drinks will eventually have zero profits. c. The producers of lime drinks will eventually have zero profits, while the producers of cola drinks have the profit levels of perfect competitors. d. The producers of lime drinks will have profit levels like perfect competitors, while the producers of cola drinks will share monopoly profits.