The use of government to supplant market outcomes is called
A) market failure.
B) rent seeking.
C) free riding.
D) efficiency.
B
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The ability of a monopoly to charge a price that exceeds marginal cost depends on
A) the price elasticity of supply. B) price elasticity of demand. C) slope of the demand curve. D) shape of the marginal cost curve.
Firms in a cartel or engaged in tacit collusion should set ________ equal to ________ to maximize profit.
A) the market marginal revenue; their firm's marginal cost B) their firm's marginal revenue; their firm's marginal cost C) their firm's marginal revenue; the market marginal cost D) the market marginal revenue; the market marginal cost
An anti-inflation policy that involves announcing and executing tough measures to stop inflation is called _____
a. cold turkey b. red tape c. a pork-barrel policy d. chokehold e. time-inconsistency
Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. Based on their production possibilities frontiers, Tom and Jerry:
A. can both benefit from trade because absolute advantage exists. B. cannot benefit from trade because Tom has the absolute advantage in both goods. C. could both benefit from trade because comparative advantage exists. D. will not decide to trade because no comparative advantage exists.