Imperfect knowledge about hazardous effects of a product will likely result in
A. insufficient resources devoted to producing a product.
B. consumers paying too high a price for a product.
C. underconsumption of a product.
D. the formation of trusts among firms.
Answer: B
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Suppose a monopoly is producing its profit-maximizing output level. Now suppose the government imposes a lump-sum tax on the monopoly, independent of its output. As a result the monopoly's profit will fall
Indicate whether the statement is true or false
A marginal tax rate is calculated as
A) change in taxes paid ÷ the change in total taxable income. B) change in taxable income ÷ change in taxes paid. C) taxes paid ÷ total taxable income. D) total taxable income ÷ by taxes paid.
The two conflicting tendencies that a firm has in an oligopolistic industry are the incentive to
a. cheat to maximize joint profits and the incentive to raise prices. b. cheat and avoid collusion and the incentive to raise price to maximize the firm's share of profits. c. increase output in order to minimize per-unit costs and the incentive to reduce price in order to maximize joint profit. d. cooperate to maximize joint profits and the incentive to cheat on the agreement in order to increase the firm's share of the profit.
Consider two groups of workers of equal skill level and experience: those who collect garbage and those who stuff envelopes with campaign fliers. Which group is likely to be paid more and why?