For complementary goods, the coefficient of cross-elasticity of demand is:
A. negative.
B. greater than one.
C. positive.
D. near zero.
Answer: A
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A firm's accounting profit is called a normal profit when its:
a. accounting profit is equal to zero. b. economic profit is equal to zero. c. opportunity cost is equal to zero. d. average cost is minimum. e. economic profit is equal to accounting profit.
Successive monopolies face the problem of:
a. double marginalization. b. volumetric interdependence. c. opportunism. d. predatory pricing.
If air pollution control is a public good, it follows that:
A. additional persons can benefit from a given amount of air pollution control without reducing the benefits enjoyed by others. B. the efficient output of air pollution control is zero. C. the more air pollution control enjoyed by any one person, the less is available to others. D. the efficient output of air pollution control can be attained by selling it by the unit in a market.
In constructing models, economists
A. make simplifying assumptions. B. consider all factors that can change. C. include all available information. D. attempt to duplicate the real world.