The problem of special interests financing congressional campaigns and presidential elections is associated with
a. government failure
b. public choice theory
c. market failure
d. negative externalities
e. government subsidies
B
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Explain how the market can reduce the incentive for credit-rating firms to take advantage of conflicts of interest
What will be an ideal response?
”Peak” pricing can best be defined as
A. setting higher prices to reflect higher demand. B. pricing to obtain maximum profit. C. setting price higher when demand is more elastic. D. raising price to determine elasticity.
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs andcorresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50Which project has the greatest variance?
A. A B. B C. C D. D
Monopolistically competitive markets are like perfectly competitive markets because in both markets, firms:
A. have some control over price. B. face substantial barriers to entry. C. face a large number of competitors. D. have no control over price.