Wages paid to teachers, police personnel, and postal workers are not transfer payments because they are payments for services and not simply "transfers" of money.
Answer the following statement true (T) or false (F)
True
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One way to view the cost structure of monopolistic competition is to say that the cost of product differentiation is equal to
A) the difference between marginal revenue and marginal cost. B) the difference between the cost of production for a monopolistically competitive firm in an open market and the minimum average total cost. C) the sum of price and marginal cost. D) the sum of marginal cost and minimum average cost.
The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to just one type of customer b. the costs of arbitraging the price differences across markets is large c. the manufacturer acquires the distributer in the lower priced market d. competition provide little ability for the manufacturer has to price above marginal cost
After a tax is imposed, a. consumers pay a higher price
b. consumers lose consumer surplus. c. producers lose producer surplus. d. all of the above are true.
If the supply of a good is perfectly inelastic, the price elasticity of supply will equal
A. positive infinity. B. zero. C. one. D. none of these.