Explain the benefits consumers enjoy from competitive markets.
What will be an ideal response?
Many consumers in the market are willing to pay a maximum price that is greater than the actual price. The sum of all of those surpluses is the total consumer surplus enjoyed in the market. In addition, consumers benefit from the variety of goods provided by many sellers. This competition helps to determine the equilibrium price in the marketplace.
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The government of Poorland increased its expenditure following a recession. This is likely to lead to ________
A) higher interest rates B) an increases in demand for labor C) a decrease in the price level D) lower real wages
Interdependence of firms is most common in
A) oligopolistic industries. B) monopolistically competitive industries. C) monopolistically competitive and oligopolistic industries. D) monopolistic industries.
Suppose y = k1/2, total factor productivity is constant and equal to 1, s = 0.40, and d = 0.10. When the economy reaches the steady state, real GDP per worker is ________
A) $2 B) $4 C) $8 D) $16
Refer to Scenario 13.1 below to answer the question(s) that follow. SCENARIO 13.1: The government of Catalina Island is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P = 55 - 0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR = 55 - 0.02Q. Universal Entertainment is interested in bidding for the right to provide cable service on Catalina Island. It has a constant average and marginal cost of $15 for providing cable service to each household.Refer to Scenario 13.1. At what level of output (number of households) is Universal Entertainment's total
revenue maximized? A. 2,500 B. 2,750 C. 5,000 D. Indeterminate from the given information