A monopoly can arise when
A) there are diseconomies of scale.
B) there are barriers to entry and no close substitutes for the good being produced.
C) a firm cannot price discriminate.
D) firms engage in rent seeking.
E) a firm must set MR equal to MC in order to maximize its profit.
B
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When asymmetric information problems drive high quality products from a market, we refer to this situation as:
A) adverse selection. B) moral hazard. C) a lemons problem. D) A and C are correct. E) B and C are correct.
How is the dividing line between poverty and nonpoverty measured? Does this method overstate the degree of poverty?
Figure 17-12
If the country illustrated in is initially trading without restrictions at a world price of $1.00, the government revenue from a tariff of $0.50 per unit is represented by area
a.
c
b.
e + g
c.
i + e + f
d.
d + e
e.
e
In labor markets, the substitution effect occurs when
A. a change in the price of a substitute input reduces the cost of capital. B. a substitute good also functions as a complement. C. the cost of production falls enough that the firm will produce a larger amount of output. D. a change in the price of a substitute input causes the demand for labor to change in the same direction.