Refer to the above figure. Suppose demand is D2 and then increases to D3. Economic rent after the change is
A. zero.
B. area CIGO.
C. area BJC.
D. area CIHF.
Answer: B
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All of the following are required to make a tying arrangement vulnerable to antitrust prosecution except which one?
A) There must be at least three products involved. B) There must be proof of an actual tie between two products. C) The seller must have substantial market power in the market for the tying product. D) There must be some nontrivial amount of commerce affected by the tying contract.
The demand curve faced by a monopolistically competitive firm
a. is the same as the market demand curve b. is less elastic than the one faced by firms in perfect competition c. is perfectly elastic d. is perfectly inelastic e. has a constant slope
Corrective taxes are unlike most other taxes because they
a. distort incentives. b. move the allocation of resources away from the social optimum. c. raise revenue for the government. d. move the allocation of resources closer to the social optimum.
What effect does the existence of discouraged workers have on the ability of the official unemployment rate to provide accurate information about the extent to which labor is employed?
What will be an ideal response?