Probably the simplest approach to the problem of oligopolistic interdependence is to
A. conduct market experiments.
B. assume that rivals will pursue a course most detrimental to the firm concerned.
C. ignore the actions of rivals.
D. increase the firm’s advertising outlay considerably.
Answer: C
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When a tariff is imposed on a good, domestic consumers of the good ________ and domestic producers of the good ________
A) win; win B) lose; win C) lose; neither win nor lose D) lose; lose E) win; lose
There is no way that externalities can be corrected.
Answer the following statement true (T) or false (F)
Which of the following is not true about moral hazard?
A. It increases the difficulty of operating private insurance markets. B. It increases the difficulty of operating public insurance markets. C. It is the tendency of people to change behavior when insured. D. It is the tendency of people with higher risks to buy more insurance.
If a firm in a perfectly competitive market raises its price
A. it will sell more products. B. it will sell nothing. C. its sales will remain unchanged. D. it will sell fewer products.