A public highway looks like a collective consumption good because there is very little traffic on it and zero congestion. Hence the marginal cost of an additional car is zero
Which of the following statements best describes why we should not assume that the road would always be a collective consumption good? a. The lack of congestion could be the result of government overproduction. b. The lack of congestion could be because of its low speed limit. c. The lack of congestion could be because of excessive police ticketing.
d. The lack of congestion is because of the lower cost of alternative means of travel.
a
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Suppose workers receive a 5 percent increase in wages and prices are rising by 5 percent. Workers will experience
A) an increase in nominal wages and a decrease in real wages. B) an increase in nominal wages and an increase in real wages. C) an increase in nominal wages but real wages are unchanged. D) a decrease in nominal wages and a decrease in real wages.
Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly. Which of the following statements regarding economic surplus in each market structure is true?
A) Under perfectly competitive conditions, economic surplus is equal to consumer surplus; there is no producer surplus because firms are price takers. Under monopoly conditions, economic surplus is equal to producer surplus. B) Under perfectly competitive conditions, economic surplus in this industry is maximized. Under monopoly conditions economic surplus is minimized. C) Under perfectly competitive conditions, economic surplus is maximized. Under monopoly conditions economic surplus is less than under perfect competition and there is a deadweight loss. D) Under perfectly competitive conditions, economic surplus in this industry equals consumer surplus plus producer surplus. Under monopoly conditions, some consumer surplus is transferred to producer surplus, but economic surplus is the same as it was under perfectly competitive conditions.
Compared with a monopolist, the demand curve faced by a monopolistically competitive firm is
A) more elastic. B) more inelastic. C) perfectly elastic. D) perfectly inelastic.
As a general rule, a recession is a decline in real GDP lasting at least:
a. one year. b. six months. c. three months. d. one month.