What is a potential negative effect of advertising?
A. It provides important information to consumers.
B. It promotes monopoly power in industry.
C. It lowers search costs in product purchases.
D. It contributes to allocative and productive efficiency.
Answer: B
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A competitive firm has been selling its output for $10 per unit and has been maximizing its profit. Then, the price rises to $14, and the firm makes whatever adjustments are necessary to maximize its profit at the now-higher price. Once the firm has adjusted, its
a. marginal revenue is lower than it was previously. b. marginal cost is lower than it was previously. c. quantity of output is higher than it was previously. d. All of the above are correct.
The effects of tariffs and quotas are: a(n) __________ in consumers' surplus, and a(n) __________ in producers' surplus
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
The most unequal distribution of income in the figure at right exists in
A. country 4
B. country 3
C. country 5
D. country 1
Money that has value apart from its use as money is called
A) fiat money. B) currency. C) convertible paper money. D) commodity money.