All of the following are examples of negative externalities except one. Which is the exception?
A. Water pollution.
B. Your roommate going on a diet.
C. Second-hand smoke.
D. Loud conversation in the workplace.
Answer: B
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The social interest theory of regulation is that
A) regulators help producers maximize economic profit. B) regulation seeks to increase the government's revenue. C) regulation causes producers to produce at a point where they are earning normal profits. D) regulation seeks an efficient use of resources. E) regulation focuses on the consumers' interests and ignores producers' interests.
In many corporations, there is "separation of ownership from control." What does this mean?
A) The board of directors controls corporate operations, although the managers of the corporation own the corporation. B) Top corporate managers only make decisions that have been approved unanimously by shareholders. C) The shareholders control the corporation, although the board of directors owns the corporation. D) The managers of the corporation run the corporation, although the shareholders own the corporation.
If sellers do not adjust their quantity supplied at all in response to a change in price, the price elasticity of supply is
a. zero, and the supply curve is horizontal. b. zero, and the supply curve is vertical. c. infinity, and the supply curve is horizontal. d. infinity, and the supply curve is vertical.
A typical firm in a cartel will hold which of the following attitudes?
A) If everyone cheats, I'm better off, and so is everyone in the cartel. B) If I alone cheat, I'm better off; if everyone cheats, I'm worse off. C) I can never do better for myself than following agreed-upon cartel rules. D) If I suspect others are planning to cheat, I'll do best for myself by deciding not to cheat.