When externalities are present in a market, social surplus is maximized.
a. true
b. false
Answer: b. false
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Which of the following statements is correct for the price elasticity of demand along a linear, downward-sloping demand curve?
A) The price elasticity of demand is constant because the slope is constant. B) At low prices, demand is elastic but at high prices demand is inelastic. C) At high prices, demand is elastic but at low prices demand is inelastic. D) The price elasticity of demand is not defined for a linear demand curve because the slope is constant. E) None of the above answers is correct.
The hospital insurance component of Medicare provides full coverage for extended time periods
Indicate whether the statement is true or false
Cell phone companies often include an activation fee with the purchase of their service. This is an example of
A) collateral pricing. B) tying. C) predatory pricing. D) unfair competition.
If it is impossible or very costly to exclude nonpaying customers from receiving a good, the good is considered to be
a. freeware. b. nonexcludable. c. a common good. d. a receiving good.