The above figure shows the Lorenz curves for four different countries. Which of the following statements CAN be made on the basis of the graph?
A) Country C has the best balance between equity and efficiency.
B) Country A is a socialist country.
C) The income distribution is more equal in country B than in country D.
D) all of the above
C
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Refer to the scenario above. Which among the following is a possible outcome if the number of bidders decreases to 45?
A) There will be no change in the outcome of the auction. B) The optimal bid for Molly will now be $831.11. C) The optimal bid for Molly will now be $745. D) The optimal bid for Molly will now be $845.
Refer to the above figure. Regulators cannot force natural monopolies to operate in the long run at a loss. Therefore, they usually require the firms to charge a price equal to
A) marginal cost, which is P1. B) marginal cost, which is P2. C) average cost, which is P3. D) average cost, which is P4.
Suppose the demand for large (and therefore high-gasoline consumption) cars decreases sharply during an energy crisis. The most likely market adjustment would be
a. a sharp rise in the price of large cars in the short run as people rush to purchase these vehicles before producers cut back on manufacturing them. b. a moderate increase in short-run prices, followed by a larger long-run price increase as the supply of large cars is depleted. c. lower short-run prices, which will lead to an expansion in the number of large cars sold. d. a decrease in the price of large cars in the short run, leading to a reduction in output, which will moderate the price decline in the long run.
Most markets are not monopolies in the real world because
a. firms usually face downward-sloping demand curves. b. supply curves slope upward. c. firms usually equate price with marginal cost. d. there are reasonable substitutes for most goods.