A firm that has a great deal of control over the price of a good is said
A) to function in a black market.
B) to create an externality.
C) to have monopoly power.
D) to be in an antitrust position.
Answer: C
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What is the rationale for government provision of education?
a. Not all incomes are equal, but everyone has the right to education regardless of wealth. b. Potential students consider only their personal benefits gained from education, but the rest of society benefits, too. c. No education would be provided in the absence of government provision because everyone would consume it without paying. d. The cost of providing education for the entire public is too large. e. The government can provide education at a much lower cost than the private sector.
The fundamental goal of a firm or a business is to
A) produce the largest number of output units possible. B) employ labor in the most socially responsible manner possible. C) organize the factors of production and take risks. D) earn the highest possible returns.
The marginal physical product (MPP) is calculated by
A) dividing total physical product by labor. B) dividing the change in total physical product by the change in the input. C) dividing the change in total cost by the change in labor. D) the difference between the output of skilled and unskilled workers.
If the demand curve is horizontal and the supply curve is vertical, shifts of the supply curve will lead to
A) changes in the equilibrium quantity only. B) changes in the equilibrium price only. C) changes in both the equilibrium price and quantity. D) changes in the quantity demanded only.