Which of the following is TRUE for a perfect price-discriminating monopoly?
A) P = MR for each unit sold
B) P = ATC for each unit sold
C) P = MC for each unit sold
D) P > MC for each unit sold
A
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U.S. Treasury bonds
A) carry no risk of default and are therefore not risky investments. B) have constant yields to maturity and are therefore not risky investments. C) have constant coupon rates and are therefore not risky investments. D) are subject to fluctuations in their market prices and are therefore risky investments.
Suppose that production of a good creates a negative externality. An excise tax equivalent to the difference between the marginal social cost and the marginal private cost of production can correct the inefficiency
a. True b. False
The fallacy of composition is the incorrect view that
a. decisions are always made at the margin. b. incentives matter only to those who behave selfishly. c. if something is true for an individual, then it must also be true for the group. d. the value of a good can be objectively measured by its cost of production.
Suppose that a tire factory produces $825,000 of output and causes $70,000 worth of pollution as a result of production. The tire factory's official contribution to GDP would be ________ and its overall contribution to society would be ________.
A. $825,000; $895,000 B. $895,000; $825,000 C. $825,000; $755,000 D. $755,000; $825,000