Pure monopolies are said to be allocatively inefficient because ________.
A. price is greater than marginal cost
B. they produce where MR > MC
C. price is less than marginal cost
D. price is equal to marginal cost
Answer: A
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The decrease in the price of a good would
A. cause a movement along the demand curve to a (lower price, higher quantity) point. B. cause a movement along the demand curve to a (higher price, lower quantity) point. C. move its demand curve to the left. D. move its demand curve to the right.
Suppose the saving rate is initially greater than the golden rule saving rate. We know with certainty that a reduction in the saving rate will cause
A) a reduction in the rate of growth in the long run. B) a reduction in output per worker. C) a reduction in consumption per worker. D) all of the above E) none of the above
A(n) ________ is a tax on an imported good
A) export quota B) tariff C) voluntary export restraint D) import quota
Why is the study of asymmetric information associated with the market for "lemons"?
A) Potential buyers of used cars have difficulty separating good used cars from bad used cars; bad used cars are often referred to as "lemons." B) Because there is little advertising in the market for lemons, buyers have difficulty determining the quality of lemons before they are purchased. C) Sellers of citrus fruit — lemons, oranges, grapefruit — know the difference between bad fruit and good fruit; buyers do not have this information. D) Most sellers of used cars have less information about their cars than the dealers who buy them; used cars are often referred to as "lemons."