The government allows firms to engage in price discrimination unless the practice:
A. allows the firm to earn positive economic profits.
B. reduces consumer surplus.
C. drives rival firms out of business.
D. increases prices to consumers.
Answer: C
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Firms are much more likely to provide non-excludable public goods than excludable public goods. ?
Answer the following statement true (T) or false (F)
The welfare costs of rent seeking will approximate _____
a. the value of the resources expended in lobbying b. the deadweight loss of taxation c. the value of the rent-seeking benefits d. zero if political markets are perfectly competitive
It costs a firm $80 per unit to produce product A and $50 per unit to produce B individually. If the firm can produce both products together at $140 per unit of product A and B, this exhibits signs of
a. Economies of scale b. Economies of Scope c. Diseconomies of Scale d. Diseconomies of Scope