In the presence of negative pollution externalities, it is more efficient to have Cournot competitors than Bertrand competitors.
Answer the following statement true (T) or false (F)
False
Rationale: It may be more efficient, or it may not. It depends on how big the externality is. If it is relatively small, the competitive outcome of p=MC under Bertrand competition is still more efficient than the Cournot outcome that restricts output too much. If the externality is large, the Cournot outcome might lie closer to the efficient output quantity.
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If a nation imports a good that can be domestically produced, what happens to the quantity consumed of the good and why?
A) The quantity consumed increases because the market price increases. B) The quantity consumed increases because the market price decreases. C) The quantity consumed remains constant because the price is unchanged. D) The quantity consumed decreases because the market price increases. E) The quantity consumed decreases because the market price decreases.
In making labor supply decisions, ________ weigh the market wage against the value of leisure and time spent in unpaid household production.
A. households B. businesses C. financial markets D. None of the above is correct.
If average annual tuition at public 4-year colleges was $1,908 in 1990, when the CPI was 130.7, and $8,655 in 2012 when the CPI was 229.6, then the real cost of annual tuition
A) rose by 354 percent during that period. B) fell by 158 percent during that period. C) fell by 354 percent during that period. D) rose by 75.7 percent during that period. E) rose by 158 percent during that period.
Lou buys a Star Wars: The Force Awakens poster at a garage sale for $30 and resells it on eBay to Kyle for $60. Which of the following statements is true?
A) The transaction is economically inefficient. B) The transaction has made Lou and Kyle better off. C) The transaction has made Lou better off and Kyle worse off. D) It is not possible for Kyle to enjoy any consumer surplus from this transaction.