Data concerning the four-firm concentration ratios for U.S. manufacturing industries indicate that
a. very few oligopolies exist in the real world but the oligopoly model is still useful because it tells us something about firm behavior
b. oligopolies are the second most prevalent market structure, monopoly being the first
c. the four leading firms usually have less than 10 percent of industry sales
d. the ratios are considerably less than the ratios in Canada and Western Europe
e. oligopolies are very common
E
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Often single-owner proprietorships seem more profitable than they really are. The reason for this is that
A) they receive special tax benefits compared to corporations. B) they use different accounting procedures. C) they often fail to consider the opportunity cost of the labor provided by the owner. D) they are not allowed to deduct depreciation expense.
If a good is produced up to the point where marginal social benefit equals marginal social cost, then:
a. social welfare is maximized. b. the good is overproduced and the market is inefficient. c. firms are earning zero profits. d. all externalities have been eliminated.
Buyers and sellers use ________ to communicate the quality of goods and services in a world of uncertainty.
A. asymmetric information B. moral hazards C. expected value D. market signals
If a forecast is made using all available information, then economists say that the expectation formation is
A) rational. B) irrational. C) adaptive. D) reasonable.