Which of the following is a government-inhibited good?
A) a lighthouse
B) national defense
C) public education
D) cocaine
D
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Which factor would facilitate tacit collusion among firms in a market?
a. an increase in the number of firms. b. a decrease in the probability the market will continue into future periods. c. a decrease in the interest rate. d. none of these.
If a single firm in a price-taker market lowers its price below the market equilibrium price,
a. it will get a larger share of the market. b. it will lose revenue without increasing the quantity it can sell. c. other firms will lower their prices. d. other firms will be driven out of the industry.
In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of $5 per widget is imposed. The price paid by buyers increases by $2 and the after-tax price received by sellers falls by $3 . The
government is able to raise $750 per month in revenue from the tax. The deadweight loss from the tax is a. $250. b. $125. c. $75. d. $50.
A demand curve that has constant price elasticity of demand coefficient equal to one at all points is a (an):
a. None of the answers are correct. b. upward-sloping straight line. c. rectangular hyperbola. d. downward-sloping straight line.