Smartphone companies protect their monopolies over new products they develop by utilizing
A. low cost production.
B. zero economic profits in the long run.
C. diseconomies of scale.
D. patent protection.
Answer: D
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In the 1980s, it became increasingly common for consumers to sign two-year leases rather than buying the cars outright. As these leases expired, the supply of used cars expanded considerably. How would the addition of this large volume of off-lease cars influence the possibility of a lemons problem on the used-car market?
a. The lemons problem would be alleviated because off-lease cars tend to be put up for sale automatically, rather than being offered only when the seller obtains private information about the car's poor quality. b. The lemons problem would be worsened because used-car prices would fall in response to the glut of off-lease cars. c. The lemons problem would be worsened because, with more used cars, searching for the appropriate car would become much more difficult for buyers. d. Very little; the existence of off-lease cars has little to do with the lemons problem.
People who apply for loans know more about their ability to repay the loan than the lenders do. This is an example of:
A. asymmetric information. B. public information. C. a negative externality. D. a community rating.
When a perfectly competitive firm makes a decision to shut down, it is most likely that
A. fixed costs exceed variable costs. B. marginal cost is above average variable cost C. price is below the minimum of average variable cost D. marginal cost is above average total cost
Inflation targeting has been adopted by the central banks of several countries including the European Central Bank
Indicate whether the statement is true or false