In the case of Interstate Bakeries and Continental Bakery, the Justice Department concluded that:
A. the merger of two firms selling close substitutes may lead to higher prices.
B. Interstate Bakeries attempted to drive out Continental by using predatory pricing.
C. a merger between the two companies would save money in production costs, and so would be good for consumers.
D. Continental attempted to drive out Interstate Bakeries by using predatory pricing.
Answer: A
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The Coase Theorem states that _____
a. in the absence of transactions costs, the allocation of resource will be independent of property right assignment b. in the absence of transactions costs, the allocation of resources will be dependent on property right assignment c. with transactions costs, the allocation of resources will be independent of property right assignment d. with transactions costs, the allocation of resources will be dependent of property right assignment
Figure 4.4 illustrates the supply of tacos. If the government offered a subsidy to Mexican restaurants for each taco they produce, this would most likely cause a movement from:
A. point a to point c. B. point c to point b. C. S2 to S1. D. S0 to S1.
Which of the following constitutes an external cost of driving an automobile?
A) insurance B) fuel C) pollution D) license
Which of the following is a correct description of the supply curve?
i. The supply curve is also the marginal cost curve. ii. The supply curve shows the dollars' worth of other goods that we must sacrifice to produce another unit of a good. iii. The supply curve shows the additional cost of producing another unit of a good. A) i only B) i and ii C) ii and iii D) i, ii, and iii E) ii only