Along a bowed-out production possibilities frontier, as more of one good is produced,
a. the opportunity cost of producing that good remains constant
b. the opportunity cost of producing that good decreases
c. efficiency decreases
d. the opportunity cost of producing both goods must remain constant
e. technology remains constant
E
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All of the following are consequences of adverse selection on good firms EXCEPT
A) the cost of external financing increases. B) firms need to rely more on internal funds. C) firms need to rely more on accumulated profits. D) firms will only be able to attain financing from the government.
Correcting a market with an externality through taxation creates ___________ total surplus compared to correcting it through a quota.
A. more B. less C. the same D. Any of these statements could be true depending on whether the tax is imposed on the buyer or seller.
Vertical foreclosure is an example of a firm:
A. engaging in penetration pricing. B. that merges with a rival firm with the intention of eliminating the rival firm's product from the market. C. that controls an essential upstream input and raises rivals' costs by refusing to sell to other downstream firms that need the input. D. engaging in a price-cost squeeze.
Economic analysis requires us to combine:
A. unlimited resources with limited wants. B. developed and developing nations. C. republicans and democrats. D. theory with observations.