Figure 9.9 depicts a market for electricity. S1 is the supply curve without the external costs. S2 is the supply curve with the $T tax. Assume electricity production incurs external costs. If the government imposes a pollution tax, the price of a mega-watt of electricity will increase by:
A. PA - PB.
B. PA - PC.
C. PB - PC.
D. 1/2 (PA - PC).
Answer: A
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The board of a U.S. corporation usually includes
A) outside directors. B) executives of competitors. C) non-executive employees of the corporation. D) All of the above.
Suppose an industry is composed of 10 firms. Each firm's share of total sales in the industry is 10 percent. If two of the firms merge, then the four-firm concentration ratio in the industry will
A) remain unchanged. B) decrease as there are fewer firms in the industry. C) increase. D) depend on the market condition faced by the industry.
Featherbedding shifts the marginal revenue product of labor curve to the right
a. True b. False
The price tag on a tennis ball in 1975 read $0.10, and the price tag on a tennis ball in 2005 read $1.00 . The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3 . In 1975 dollars, a 1975 tennis ball cost $0.10 and a 2005 tennis ball cost
a. $0.27, so tennis balls were cheaper in 1975. b. $0.27, so tennis balls were cheaper in 2005. c. $3.66, so tennis balls were cheaper in 1975. d. $3.66, so tennis balls were cheaper in 2005.