According to public choice theory, a voter will favour a candidate whose political program is
a) favoured by the median voter
b) perceived by the voter to be in his self-interest
c) closest to efficiency
d) all of the above
Ans: b) perceived by the voter to be in his self-interest
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In a recent court case, an expert witness defined a monopoly as a firm that can "raise price without reducing its total revenue"
What does this imply about the elasticity of demand? Would this definition hold for a profit-maximizing monopoly? Explain.
Which of the following characteristics of perfect competition does not apply in monopolistic competition?
a. free entry and exit b. homogeneous products c. numerous participants d. perfect information
In the short run, all prices are flexible.
a. true b. false
Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the likely change in capital flows in sectors X and Y will eventually________ in industry X and ________ in industry Y.
A. increase the price to P1; increase the price to P0 B. decrease the price to P0; decrease the price to P1 C. increase the price to P1; decrease the price to P1 D. decrease the price to P0; increase the price to P0