When does a kinked demand curve occur?
a. When competing oligopoly firms commit to match price cuts but not price increases
b. When a natural monopoly raises its prices and provides an opportunity for market entry
c. When competing oligopoly firms agree to increase prices at the same time and rate
d. When one firm in a duopoly cuts prices and forces the exit of the other firm
a. When competing oligopoly firms commit to match price cuts but not price increases
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Refer to Scenario 19-1. The value added of CANOES-R-US for each canoe equals
A) $1,200. B) $800. C) $500. D) $400.
For a horizontal demand curve,
a. the slope is undefined, and the price elasticity of demand is equal to 0. b. the slope is equal to 0, and the price elasticity of demand is undefined. c. both the slope and price elasticity of demand are undefined. d. both the slope and price elasticity of demand are equal to 0.
Please refer to the following diagram. 
A horizontal interpretation of the demand curve for a product
A. stipulates price as the independent variable in the price quantity relationship. B. indicates that a buyer can buy all she/he wants to buy at a given price. C. indicates that a seller can sell all he/she wants to sell at the given price. D. tells what prices would be required to sell various quantities of output.
Which of the following statements is true?
A. Sales, excise, and flat-rate taxes violate the ability-to-pay principle of taxation fairness because each results in a smaller dollar burden on the poor than the rich. B. Government failure may occur if voters are rationally ignorant. C. Special-interest group political pressure results only from programs for which benefits outweigh costs. D. Majority-rule voting and benefit-cost analysis result in the same projects being undertaken.