Since revenue increases with increases in price when demand is relatively inelastic, monopolists produce on the inelastic part of demand.
Answer the following statement true (T) or false (F)
False
Rationale: The first part is true, the second part is not. It is precisely because revenue increases with an increase in price on the inelastic part of demand that monopolists will produce on the elastic part of demand.
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Answer the following statement(s) true (T) or false (F)
1. When both players have dominant strategies, there is one and only one Nash equilibrium 2. In any game situation, at least one player always has a dominant strategy. 3. An outcome is a Nash equilibrium if and only if both players agree that the outcome is desirable. 4. The main problem in the Prisoners' Dilemma is that the players involved fail to agree on an outcome that would be mutually beneficial. 5. When both players have dominant strategies, there is only one Nash equilibrium.
The table above shows the distribution of income in Swacko. The government of Swacko imposes a 20 percent tax on the people with the highest 40 percent of income
The government then distributes 50 percent of the tax collected to the lowest 20 percent and 25 percent to the second 20 percent and the middle 20 percent. Suppose that the before-tax group incomes remain as above. Before and after the distribution, what percentage of national income belongs to the lowest 20 percent? A) 2 percent; 10 percent B) 20 percent; 20 percent C) 5 percent; 25 percent D) 2 percent; 2 percent
All remedies for externalities share the goal of
a. moving the allocation of resources toward the market equilibrium. b. moving the allocation of resources toward the socially optimal equilibrium. c. increasing the allocation of resources. d. decreasing the allocation of resources.
Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused
A) housing prices to fall during that period. B) mal-investment, that is, excessive investment in housing construction during 2002-2005. C) a subsequent increase in interest rates that led to a housing boom. D) a reduction in housing construction during 2002-2005.