Taxing people according to their marginal valuations of a public good may be efficient, but it may not be fair if incomes differ
Indicate whether the statement is true or false
true
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When there are diminishing marginal returns to labor, the marginal product of the last worker hired must be negative
Indicate whether the statement is true or false
Eliminating frictional unemployment would be good for the economy
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One of the conclusions of the model of monopoly is that the firm earns economic profits above the required opportunity cost of the factors of production. Are these profits lost to society? Do they take spending power from the economy, and act as a brake on economic growth?
What will be an ideal response?
The airlines industry is dominated by three firms with the following market shares: Quartz (50 percent), Modine (25 percent), and Tetran (20 percent). Which action identifies the price leader in the industry?
a. Quartz unilaterally announces that it is raising its fares. b. Modine increases its fares after its competitors announce price hikes. c. Modine and Tetran formally meet and announce they are increasing their fares. d. Tetran rises its fares following a rate hike by the other firms in the industry.