Firms with market power must decide all of the following except

A. how much to produce.
B. what price to charge for their output.
C. how much to supply in each input market.
D. how to produce it.


Answer: C

Economics

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Compared with the market clearing price of a health care service covered by Medicare, the Medicare program pays a ________ price to health care providers and charges a ________ price to consumers

A) lower, lower B) lower, higher C) higher, lower D) higher, higher

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If a monopolist's marginal costs increase by $1 for all levels of output, then the monopoly price will

a. rise by $1. b. rise by more than $1. c. rise by less than $1. d. not change, but profits will decrease.

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If a teacher tells a student that those who attend the study session typically score higher on the final exam

A. the student has a negative incentive to attend the study session because she will be punished if she does not go. B. the student has a positive incentive to attend the study session because she may get a higher grade. C. a "C" student will be making an irrational decision if she decides to skip the study session since she has plenty of time to go. D. the student has no greater incentive to attend because there is no guarantee she will get a higher grade on the exam.

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