Regulatory capture is where
A) governments take over monopolies through use of regulation.
B) firms impose barriers to entry on regulators.
C) regulators of an industry look out for the industry instead of society.
D) the government taxes the profits of monopolies such that all producer surplus goes to the government.
C
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A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-even level by deliberately lowering its price to force some of its competitors out of the market
Indicate whether the statement is true or false
Brandon, an economist, is a believer of the rational expectations school. According to him, which of the following is likely to affect the levels of output and employment in an economy?
a. An expansionary monetary policy, if it is fully anticipated b. A recessionary monetary policy, if it is fully anticipated c. A monetary policy that is unanticipated d. A fiscal policy that is anticipated e. The Fed's announcement of no change in monetary policy
A production possibilities curve shows the various:
a. prices that can be charged for capital and consumption goods. b. combinations of prices and outputs that can be produced. c. combinations of goods the economy has the capacity to produce. d. combinations of resources and prices that the economy can produce.
Suppose a firm uses both labor (L) and capital (K) and its long-run production function is given by the expression Q = F(L,K) = L2 × ?(L + 2K). The firm currently uses 100 units of capital. Assuming labor is finely divisible, graph the firm's short-run production function for the first five workers.
What will be an ideal response?