The Cost-Benefit Principle is:
A. not an economic principle.
B. neither a positive nor a normative economic principle.
C. a normative economic principle.
D. a positive economic principle.
Answer: D
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In an oligopoly, output is
A) less than the output in monopoly. B) greater than the output in perfect competition. C) in all circumstances the same as the output in perfect competition. D) somewhere between the output in monopoly and that in perfect competition outcomes. E) in all circumstances the same as the output in monopoly.
Suppose the market-clearing price of milk is $3.00 per gallon, but the diary industry persuades the government to establish a legally-mandated price support at $4.00 per gallon. The newly legislated price tends to
A) reduce the demand for milk. B) increase the production of milk. C) create a shortage of milk. D) decrease the price of milk products.
Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $5, what is the value of marginal product of the second worker?
A) $100 B) $20 C) $30 D) $125
File-sharing programs such as Napster, Kazaa, and iMesh make it possible for individuals to exchange music files over the Internet
All else constant, which of the following statements best describes how the development of these programs has affected the retail market for new music CDs? A) Demand for CDs has decreased, causing equilibrium price and quantity to decrease. B) Demand for CDs has increased, causing equilibrium price and quantity to increase. C) Demand for CDs has decreased, causing equilibrium price to decrease and equilibrium quantity to increase. D) Demand for CDs has increased, causing equilibrium price to increase and equilibrium quantity to decrease.