Tax results in inefficient underproduction because it...
What will be an ideal response?
Drives a wedge between price buyers pay and price sellers recieve
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Which of the following indicates the major difference between monopolists and competitive price searchers?
a. Monopolists will always be able to make economic profit; competitive price searchers will not. b. Barriers to entry are high under monopoly but low in competitive price-searcher markets. c. Monopolists will face a downward-sloping demand curve; competitive price searchers will not. d. Unregulated monopolists will charge prices that exceed marginal cost; competitive price searchers will not.
In this graph, the market price is equal to ______.
a. $5
b. $6
c. $20
d. $120
Maxine and Deborah both got hair extensions, costing each of them $300. Maxine's hair was done perfectly. She enjoyed the new look. The job on Deborah's hair was all botched u
A) Deborah did not incur a sunk cost. B) Maxine did not incur a sunk cost. C) Both Maxine and Deborah each incurred a $300 sunk cost. D) Only the hairdresser incurred a sunk cost.
Which of the following statements best describes an inferior good?
A) An inferior good is a good whose quantity supplied always exceeds the quantity demanded. B) An inferior good is a good whose demand decreases with an increase in consumers' income. C) An inferior good is a good that is sold at a subsidized price. D) An inferior good is a good that is rationed by the government.