Answer the following questions true (T) or false (F)
1. The four-firm concentration ratio of the aircraft industry is over 80 percent. Most economists would consider this industry an oligopoly.
2. According to the textbook, the most important barrier to entry is economies of scale.
3. Because of the flaws of the concentration ratio as a measure of the extent of competition in an industry, some economists prefer another measure of competition, the Herfindahl-Hirschman Index.
1. TRUE
2. TRUE
3. TRUE
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You won a free ticket to see the latest Star Trek movie this Friday night (which you can costlessly resell for its face value of $15). Your favorite band is also performing on Friday and is your only alternative activity. Friday is your last chance to see either the movie or the band. Tickets to see your favorite band cost $30, and on any given day, you would be willing to pay as much as $50 for a ticket. Based on this information, what is your opportunity cost of going to see the Star Trek movie on Friday?
A. $30 B. $35 C. $50 D. $0
Refer to Figure 9.1. If the government establishes a price ceiling of $20, total consumer and producer surplus will be
A) $30. B) $400. C) $600. D) $900. E) $1200.
Refer to the above figure. S1 is the supply curve that includes only private costs. S2 is the supply curve that includes social costs. If the firm sets output by focusing on private costs, the per-unit external cost will equal
A) P2. B) P4 - P2. C) P4 - P1. D) P2 - P1.
The national debt is unlikely to cause national bankruptcy because the federal government can:
a. raise taxes. b. print money. c. refinance its debt. d. all of these.