A single price profit maximizing monopolist is inefficient because
A. it perfectly price discriminates when it can.
B. it produces too much output.
C. it produces where price equals marginal cost rather than where marginal cost equals marginal revenue.
D. the sum of consumer and producer surplus is less than it could be.
Answer: D
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________ and ________ are the largest sources of revenue collected by the federal government
A) Individual income taxes; corporate income taxes B) Individual income taxes; social insurance taxes C) Excise and other taxes; individual income taxes D) Corporate income taxes; excise and other taxes
Any risk-averse individual would always
A) take a 10% chance at $100 rather than a sure $10. B) take a 50% chance at $4 and a 50% chance at $1 rather than a sure $1. C) take a sure $10 rather than a 10% chance at $100. D) take a sure $1 rather than a 50% chance at $4 and a 50% chance at losing $1. E) do C or D above.
The Pricing Chips suggests that consumers choose between substitutes based on
A) comparative advantages. B) absolute prices. C) absolute opportunity costs. D) relative prices.
In an idealized laissez-faire world, the distribution of products is
A. the most efficient. B. the most fair. C. purely random. D. unpredictable.