When a supplier imposes resale price maintenance on its dealers, social gain will increase as long as
a. the supplier chooses to charge a competitive price for its product.
b. the value consumers receive from dealer services outweighs their cost.
c. dealers are allowed to charge consumers less than the supplier's recommended retail price.
d. dealers are able to enter and exit the industry costlessly.
b. the value consumers receive from dealer services outweighs their cost.
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Price floors are typically accompanied by a standard series of symptoms. What are they?
What will be an ideal response?
Which of the following is a negative externality connected to automobile transportation?
A) Driving faster than the 65 mph speed limit is not allowed, even though individuals are able to do it, and many want to. B) In an accident, a person who chooses not to wear a seatbelt becomes an object moving around the inside of the car, possibly hitting other, belted-in, passengers with lethal force. C) Gasoline is taxed on a per-gallon basis. D) Gasoline is imported, and thus increases the trade deficit. E) While stuck in traffic, you have a chance to listen to your favorite CD, which you haven't had the time to do in other places.
Comparative advantage is
a. the ability of an individual to specialize and produce a greater amount of some good than can another individual b. the number of units of one good given up in order to acquire something c. the ability of an individual to produce a good at a lower opportunity cost than some other individual can d. an expression for the amount of labor a particular individual needs to produce a fixed amount of capital goods e. a reference to an individual having the greatest opportunity cost of producing the good and produces it with the fewest resources
When government owns a natural monopoly and avoids subsidies, it:
A. still creates deadweight loss. B. sets price above marginal cost. C. recognizes setting price equal to marginal cost would cause the enterprise to incur losses. D. All of these statements are true.