Evaluate the following statement: "Competitive price-searcher markets are inefficient relative to purely competitive markets since prices are higher and firms don't produce an output rate that minimizes average total cost. As a result, government action should be undertaken to remedy this situation."
Competitive price-searcher markets do have higher prices, and average total costs are not minimized. However, government intervention is unlikely to improve the situation. Consider the following three points. First, consumers may value the wider variety of quality and styles in competitive price-searcher markets. Second, advertising often reduces search time and provides valuable information. Third, competitive price searchers have incentives to operate efficiently and innovatively.
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"Diminishing marginal utility means a downward sloping total utility curve." True or false? Explain
Indicate whether the statement is true or false
Last year you earned $45,000 and paid $9,000 in income taxes. This year you earned $60,000 and paid $15,000 in income taxes. What kind of income tax do you face?
A) regressive B) progressive C) proportional D) traditional
________ in taxes will decrease consumption spending, and ________ in transfer payments will increase consumption spending
A) A decrease; a decrease B) An increase; an increase C) An increase; a decrease D) A decrease; an increase
Quebec is capable of producing 10 pallets of wood shingles or 8 barrels of maple syrup with a unit of labor. Vermont is capable of producing 12 pallets of wood shingles or 12 barrels of maple syrup with a unit of labor. Assume that this is typical of
the labor force as a whole. Which location has the absolute advantage and which has the comparative advantage, in the production of each good? Can these locations reap gains from trade?