Economists define efficiency as
A. output maximization.
B. the absence of waste.
C. input maximization.
D. the presence of surplus.
Answer: B
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The "lemons" problem is that
a. cars of verifiable high quality are withheld from the used car market b. cars of verifiable low quality are withheld from the used car market c. cars of unverifiable high quality are withheld from the used car market d. cars of unverifiable low quality are withheld from the used car market
Models are used to describe cause-and-effect relationships.
Answer the following statement true (T) or false (F)
If the government were to impose a lump-sum tax on a monopolist, what is likely to happen to the quantity produced of a commodity and the price charged relative to the situation where there is no lump-sum tax imposed?
A) No change in price, quantity produced, or profit would occur. B) The price would fall and the quantity produced would fall C) No change in price or quantity produced, only a reduction in profit D) The price would fall but the quantity produced would rise
Assume that labor is a variable input. The average wage of workers increases in a purely competitive industry. This change will result in a(n)
A. increase in marginal cost for firms in the industry and an increase in the industry supply curve B. decrease in marginal cost for firms in the industry and a decrease in the industry supply curve C. decrease in marginal cost for firms in the industry and an increase in the industry supply curve D. increase in marginal cost for firms in the industry and a decrease in the industry supply curve