Ownership is a legal "rule of the game" that establishes
What will be an ideal response?
both privileges and responsibilities.
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Average fixed cost: a. can be calculated by dividing total fixed cost by the level of output produced
b. can be graphed as a horizontal line, with dollars on the vertical axis and quantity on the horizontal axis. c. decreases as output increases. d. is characterized by both a. and c.
Which of the following statements is false?
A) Asymmetric information can exist both before and after a transaction. B) Moral hazard occurs when one party to a transaction changes his or her behavior in a way that is hidden from and costly to the other party. C) Adverse selection has the potential to eliminate some markets. D) none of the above
Refer to the above graph. A monopolistically competitive firm was initially successful, but then its rivals started an advertising campaign that undercut its market position. This situation would cause the demand curve for the monopolistically competitive firm to shift from:
A. B to A and become more elastic. B. B to A and become less elastic. C. A to B and become more elastic. D. A to B and become less elastic.
Which of following is the best example of a monopoly if we use a broader definition of monopoly?
A) Spuds McKenzie, a wealthy potato farmer in Idaho B) Cheap Gas, one of two gasoline stations in a large rural community C) Santos Tacos, the only taqueria in the small town of Santosville D) Zippie Rentals, a car rental service in Boston