If the wage rate in a monopsonistic industry is $15, the marginal factor cost will be:
a. $0.
b. $1.
c. $15.
d. greater than $15.
e. less than $15.
d
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Over time, state and local governments have passed regulations that limit entry into certain markets. For example, in most locations beauty shops and barber shops must obtain a license to do business
The usual justification for such licensing requirements is to better ensure that only qualified people are offering such services. Considering the efficiency implications of having more or less firms serve a particular market, and the fact that consumers can "vote with their feet" (i.e., buy from a different if they aren't satisfied), is such regulation justified from an economic perspective? Why or why not?
The short-run supply curve of a perfectly competitive firm is: a. the average variable cost curve
b. the average total cost curve. c. the same as the demand curve. d. marginal cost above average variable cost.
If the government set a price floor at $18
A. there would be a temporary surplus, then prices would fall to equilibrium.
B. the price floor would not have any effect on this market.
C. then quantity demanded would be greater than quantity supplied.
D. there would be a permanent surplus, at least until the price floor was lifted.
A lawsuit seeking compensation for damage from pollution
A) will ruin any chances the Coase theorem has of working to avoid the situation in the first place. B) is a substitute for bargaining, but an inefficient one. C) is a substitute for bargaining, and it can lead to the efficient solution. D) is preferable to switching the property rights between the parties. E) is how the Coase theorem was meant to work in the first place.