For an oligopoly, when the quantity effect outweighs the price effect, the typical firm may find it optimal to:
A. decrease output.
B. increase output.
C. collude.
D. expect firms will enter the industry.
Answer: B
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Suppose a human life is worth $10 million. Installing a better lighting system in the city park would reduce the risk of someone being murdered there from 3.5 to 2.9 percent over the life of the system. The city should install the new lighting system if its cost does not exceed
a. $60,000. b. $290,000. c. $350,000. d. $600,000.
Supply curves are formed by ______.
a. minimum prices people are willing and able to sell at b. maximum prices people are willing and able to pay c. minimum prices people are willing and able to pay d. maximum prices people are legally able to sell at
Scarcity:
a. is only a problem in communist countries b. is a problem in both communist and socialist countries, but not in market economies. c. does not exist in wealthy countries. d. will never be eradicated because humans develop new wants as productive capabilities improve.
Trade restrictions cause
A. higher prices. B. economic inefficiency. C. both higher prices and economic inefficiency. D. neither higher prices nor economic inefficiency.