Which of the following is true regarding private ownership?
a. Relative to common ownership, private ownership generally leads to less conservation of resources.
b. With private ownership, owners are held accountable for using their resources in a manner that harms the resources of others.
c. Private ownership generally gives the owner little incentive to find ways to use the resource wisely.
d. With private ownership, resource owners have little incentive to consider the preferences of others when deciding how to employ a resource.
B
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Value and price can be compared by noting that
A) they are the same thing. B) value is always greater than price. C) value is what we must pay, while price is what we are willing to pay. D) price is what we must pay, and value is what we are willing to pay. E) value is what the seller receives when we buy a good, and price is what we must pay when we buy a good.
Under a marginal cost pricing rule, a natural monopoly
A) makes a reasonable profit. B) makes an economic profit. C) earns accounting profits, but breaks even in economic terms. D) incurs an economic loss. E) makes a normal profit, but it cannot be determined whether or not it makes an accounting profit.
In comparing the Cournot equilibrium with the competitive equilibrium,
A) both profit and output level are higher in Cournot. B) both profit and output level are higher in the competitive equilibrium. C) profit is higher, and output level is lower in the competitive equilibrium. D) profit is higher, and output level is lower in Cournot.
If producers incorrectly set the price of their product too low:
A. a shortage will result. B. a surplus will result. C. equilibrium will result. D. the industry will die out soon.