Oligopoly is a market structure where one firm produces all of the output in the market
a. True
b. False
Indicate whether the statement is true or false
False
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Assume that an individual has to choose between two options: buying a mobile phone, or buying an iPod. The expected cost of buying a phone is $700 and the expected benefit is $900
The expected cost of buying an iPod is $300, and the expected benefit is $600. How does the individual arrive at the optimal choice if he implements: a) optimization in levels? b) optimization in differences?
A tax on a specific good or service is called an ad valorem tax
a. True b. False
If Congress instituted an investment tax credit
a. it would make buying bonds more desirable, so the demand for loanable funds would shift. b. it would make buying capital goods more desirable, so the demand for loanable funds would shift. c. it would make buying bonds more desirable, so the supply of loanable funds would shift. d. it would make buying capital goods more desirable, so the supply of loanable funds would shift.
The pure monopolist who is nondiscriminating must decrease price on all units of a product sold in order to sell additional units. This explains why:
A. a monopoly has a perfectly elastic demand curve. B. there are barriers to entry in pure monopoly. C. marginal revenue is less than average revenue at all levels of output. D. total revenues are greater than total costs at the profit-maximizing level of output.