Which of the following factors are involved in monopolistic competition?
a. operates at minimum ATC; allocative inefficiency; productive efficiency
b. fails to operate at minimum ATC; allocative inefficiency; productive inefficiency
c. operates at minimum ATC; allocative efficiency; productive inefficiency
d. fails to operate at minimum ATC; allocative efficiency; productive efficiency
b. fails to operate at minimum ATC; allocative inefficiency; productive inefficiency
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Answer the following statement(s) true (T) or false (F)
1. In a deposit-refund system, the deposit makes the polluter internalize the externality by absorbing the cost of any damage it might generate in advance. 2. To effectively internalize the externality, the deposit component of a deposit-refund system must raise the MPC of illegal waste disposal by the MECmeasured at the competitive output level. 3. Suppose that Firm 1 and Firm 2 face marginal abatement costs of MAC1 = 2.5A1 and MAC2 = 1.5A2, respectively, and that tradeable permits for pollution are issued such that a total of 20 units must be abated. If firm 1 abates 7.5 units, and firm 2 abates 12.5 units, then both firms have an incentive to trade. 4. If Firm X is abating 9 units with an MACX = 0.6AX, and Firm Y is abating 11 units with an MACY = 0.9AY, then Firm Y should do less of the abating and Firm X should do more in order to lower the overall costs of abatement.
Explain the concept of "learning by doing" with respect to infant industry protection
What will be an ideal response?
In the United States, the bulk of health care spending is paid by health insurance companies
Such a system is also called a third-party payer system where consumers of health care pay a nominal fee and the rest are paid by the health insurance provider. Why might such a system lead to an inefficient outcome? A) Consumers fearing that excessive use of health care services may lead to a rise in insurance premiums tend to under-consume health care services. B) Health insurance companies have an incentive to control cost and therefore tend to deny consumers many cutting edge medical treatments. C) Consumers have an incentive to over-consume health care services because they pay prices well below the cost of providing these services. D) Physicians concerned that insurance companies may not approve payments tend not to order expensive tests for their patients.
A firm practicing direct price discrimination will charge a higher price to
a. Consumers known to have an elastic demand b. All consumers c. Consumers known to have an inelastic demand d. Consumers known to have a unitary elastic demand