Refer to the scenario above. If the marginal cost of producing the last unit of the good is $40, Nash equilibrium will occur when both firms charge a price of ________
A) $20
B) $40
C) $60
D) $70
B
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The capture theory holds that regulations are supplied to maximize ________
A) total sales B) economic profit C) marginal product D) consumer surplus
Contractionary fiscal policy in the United States reduces domestic income, prices, and interest rates, so the exchange rate will decrease.
Answer the following statement true (T) or false (F)
If the demand for a product is perfectly inelastic, the incidence of an excise tax will be:
A. entirely on the buyer. B. mostly on the buyer. C. entirely on the seller. D. mostly on the seller.
Suppose that a powerplant is given a permit to pollute 10 tons of carbon into the atmosphere. As the powerplant operates, it can generate $200 of profit selling electricity per ton of carbon that it sends into the atmosphere. If the price of the carbon permit is $100 per ton, then:
A. the powerplant is better off shutting down and selling its permit. B. the powerplant is better off buying more permits and selling more electricity. C. the powerplant is better off selling electricity and using the permits to pollute 10 tons of carbon. D. the powerplant is better off shutting down and buying more permits.