In the kinked-demand model of noncollusive oligopoly, if one firm increases its price, the most likely reaction of the other firms will be to:
A. increase their prices.
B. decrease their prices.
C. not change their prices.
D. fix prices.
Answer: C
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According to the text, because people in an urban-industrial society will always disagree to some extent about who ought to have which rights,
A) it is unreasonable to expect negative externalities to be completely eliminated. B) negative externalities cannot be reduced without government coercion. C) negative externalities should not be thought of as the consequence of disagreement over property rights. D) there is no point in discussing the matter. E) we must depend upon government to decide exactly what should be prohibited or commanded.
The above figure shows the U.S. market for wheat. With international trade, the United States exports ________ of wheat
A) 300,000 tons B) 500,000 tons C) 700,000 tons D) 400,000 tons E) None of the above answers is correct because the United States imports wheat.
If a Pigovian tax is not large enough, the resulting market quantity:
A. will be equal to the efficient quantity. B. will be more than the efficient quantity. C. will be less than the efficient quantity. D. will be where the social marginal cost equals the social marginal benefit.
The purpose of the Earned Income Tax Credit Program (EITC) is to
A) provide rebates of Social Security taxes to low-income workers. B) encourage low- and moderate-income workers to take second jobs to increase their income. C) provide in-kind services such as food stamps and public housing to those individuals who have poor credit. D) give tax credits to low-income individuals who do volunteer work in their communities.