If Lady Gaga insists that tickets to her concert be sold for $100 each rather than the $500 each that could be charged as reflected by demand for those tickets, then the result will be
A) to create an excess supply of tickets.
B) to eliminate $150 worth of economic rent per ticket.
C) that part of the economic rent will be dissipated by scalpers, radio station owners, etc.
D) that the demand for tickets will decrease.
Answer: C
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Business's cost of changing prices is referred to as:
A) inflation tax. B) menu costs. C) intangible costs. D) shoeleather costs.
If the government regulates the price a monopoly can charge, and the price ceiling is set below what the competitive market price would be, then
A) a shortage will exist. B) a surplus will exist. C) producer surplus is maximized. D) consumer surplus is maximized.
John loves to travel. He would never—but absolutely never! —turn down the opportunity to go on a trip. This means that, for John,
a. the total utility of travel always increases b. marginal utility of travel never decreases c. the law of diminishing marginal utility does not apply to travel d. marginal utility of travel is always zero e. for every next trip he takes, consumer surplus increases
Low Bar Steel factory produces runoff that affects the water supply in one way or another for more than 100,000 households and businesses. Why would it be impractical for the Coase theorem to apply to a workable solution in this case?
a. Potential benefits outweigh the costs. b. There is no externality. c. There are too many transactors. d. Property rights are clearly defined.