In perfect competition, the elasticity of demand for the product of a single firm is
A) 0.
B) between 0 and 1.
C) 1.
D) infinite.
D
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If the government charged a tax on monopolists equal to, say, 75 percent of their economic profits, what would happen to the level of output the firm would produce? What about the price? Explain.
What will be an ideal response?
According to the invisible hand theorem, as stated in the text,
A. even non-competitive markets are able to achieve Pareto efficient outcomes. B. an equilibrium produced by competitive markets will exhaust all gains from exchange. C. non-market forces can prevent the markets from guiding consumers to the contract curve. D. government interaction is sometimes needed as an invisible hand to lead the economy toward efficiency.
Government intervention in the market
A. Does not involve an opportunity cost if market outcomes are improved. B. Always involves an opportunity cost. C. Never involves an opportunity cost because only market activities result in other goods and services being given up. D. Results in the free-rider dilemma.
In 1960, out-of-pocket spending on health care in the United States was
A) 2.2 percent. B) 6 percent. C) 48 percent. D) 64 percent.