Which of the following is not a characteristic of monopolistic competition?
a. a large number of sellers
b. firms are price takers
c. free entry into the market
d. a differentiated product
b
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It makes sense to measure relative costs in terms of leisure time
A) because leisure time is of equal value to everyone. B) because leisure time is the ultimate good. C) only if leisure time is of equal value to everyone. D) only in societies with labor-saving technologies.
Smoking increases the risk of lung infections not only for active smokers but also for other people inhaling the smoke passively. Which of the following will help in reducing smoking?
A) A corrective tax B) A life insurance C) A health insurance D) A health tax
If the price elasticity of demand for canned soup is estimated at -1.62. What happens to sales revenue if the price of canned soup rises?
A) It falls by 162 percent. B) It rises. C) It falls. D) It rises by 1.62 percent.
A tax on a previously untaxed monopoly-produced good will necessarily lower total welfare if
A) the demand curve is relatively inelastic. B) the demand curve is relatively elastic. C) less than the socially optimum is produced before the tax. D) more than the socially optimum is produced before the tax.