When would you expect economic profits in an industry to be zero?
a. When firms are entering the industry
b. When firms are leaving the industry.
c. When existing firms are growing.
d. When firms have no incentives to enter or exit.
d
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When Cody went to the physician with a sore elbow, after hearing Cody's symptoms and examining the elbow manually, Cody's physician had two options: (1) prescribe an anti-inflammatory drug and advise Cody to abstain from vigorous physical activity for a period; or (2) advise Cody to undergo a magnetic resonance imaging (MRI) exam, a costly diagnostic procedure. Which of the following physicians is more likely to recommend option 2?
A. A physician who is concerned about the marginal cost of an MRI. B. All physicians would recommend option 2. C. A physician who is compensated under a conventional health insurance plan. D. A physician who is part of an HMO.
Which of the following is an assumption of the Cournot model?
A. Each firm takes the output of the other firm as given. B. There is only one firm in an industry. C. The firms behave so as to maximize their revenues. D. Firms collude to fix prices and quantities.
Consumer surplus ________
A) equals total revenue minus marginal cost B) is maximized when the market outcome is efficient C) equals total revenue minus opportunity cost D) plus producer surplus is maximized when resources are used efficiently
The Consumer Financial Protection Bureau is part of the
A) Treasury Department B) Federal Reserve System C) Justice Department D) Commerce Department