A rise in price (prod quota)
What will be an ideal response?
Because supply decreases, raises price
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Refer to Scenario 10.3. Compared to a competitive red herring industry, the monopolistic red herring industry
A) produces more output at a higher price. B) produces less output at a higher price. C) produces more output at a lower price. D) produces less output at a lower price. E) not enough information to relate the monopolistic red herring industry to a competitive industry.
In general, a producer's marginal cost of additional units of quality ________ as more units of quality are included in the product, causing the marginal cost curve from quality improvement to be ________ sloping.
A) falls; downward B) increases; downward C) falls; upward D) increases; upward
Which of the following statements about opportunity costs is TRUE?
I. The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions. II. Opportunity costs only measure direct out of pocket expenditures. III. To calculate accurately the opportunity cost of an action we need to first identify the next best alternative to that action. a) III only. b) I and III only. c) II only. d) None of the statements is true.
The idea that individuals can reach an efficient equilibrium through private trades, even in the presence of an externality, is called:
A. market failure. B. trade quotas. C. the invisible hand. D. the Coase theorem.