The distinguishing of products by brand name, color, and other attributes
A) is known as interdependence.
B) is known as product differentiation.
C) leads to many firms in the market.
D) leads to collusion.
Answer: B
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Which of the following is used to explain why a consumer's willingness to buy a cell phone increases as the number of other people who own and use cell phones increases?
A) network externalities B) diminishing marginal utility C) market failure D) the income effect of a price change
Firms that emit toxins into the air:
a. underproduce because the private cost of production exceeds the social cost. b. overproduce because the social cost of production exceeds the private cost. c. produce the same as nonpolluting firms. d. produce at the socially optimal amount.
The economic profits of many monopoly firms are reduced as a result of
a. rent-seeking activity b. government regulation c. demand inducement d. rent-seeking activity and price floors e. both a. and b.
The current surplus of the Social Security system is expected to become a deficit sometime around 2018 because the
a. payroll tax rate is scheduled to decline at that time. b. number of workers relative to the number of Social Security recipients will decline as the baby boom generation moves into the retirement phase of life. c. stock market is not expected to perform nearly as well during the next two decades as was the case during the 1980s and 1990s. d. growth rate of the U.S. economy is expected to slow during the next two decades.