A consumer values a car at $30,00 . and a producer values the same car at $20,000 . If the transaction is completed at $24,000 . the transaction will not take place if:
a. The tax is equal to the seller surplus
b. The tax is smaller than the total surplus
c. The tax is larger than the total surplus
d. The tax is smaller than the buyer surplus
c
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Refer to Figure 4.2. A Nash equilibrium exists
A) only where all three players go to the movie theater. B) only where all three players go to the bowling alley. C) where all three players go to the movie theater and where all three players go to the bowling alley. D) These is no Nash equilibrium in this game.
Which of the following explains why mortgages weren't considered securities prior to 1970?
A) The Federal Reserve Act of 1913 prohibited mortgages from being considered securities. An amendment to the Act was approved in 1970 that allowed mortgages to be considered securities. B) Prior to 1970, mortgages were rarely resold in the secondary market. C) Until 1970, the average annual increase in housing prices did not allow the buying and selling of mortgages to be profitable. There has been a significant annual increase in housing prices and mortgage values since 1970. D) Congress passed a law in 1970 stipulating that mortgages could be classified as securities.
To maximize profits, a monopolist produces the quantity by which of the following?
a. Marginal revenue equals average total cost. b. Price equals marginal revenue. c. Marginal revenue equals marginal cost. d. Price equals marginal cost.
Coca-Cola has a secret formula that has never been copied. This is because Coca-Cola
a. is an unbalanced oligopoly b. has a trademark that cannot be copied c. has patent rights on the formula d. has exclusive access to formula information e. is a natural monopoly