What is one reason existing firms might lobby the government to increase regulation in their industry?
A) It increases entry and exit costs, thereby reducing producer surplus to existing firms.
B) It increases entry and exit costs, thereby potentially increasing producer surplus to existing firms.
C) It increases entry and exit costs, but has no impact on producer surplus.
D) Firms cannot be trusted to treat their customers fairly and ethically.
B
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If expectations about future income change, there is
A) a decrease saving if people expect income to decrease in the future. B) a decrease in saving if people expect income to increase in the future. C) an increase in saving if people expect income to increase in the future. D) no change in saving until income actually changes. E) a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.
One effect of a stronger dollar is
A) an increase in U.S. exports and a reduction in U.S. imports. B) a reduction in U.S. exports and an increase in U.S. imports. C) an increase in net exports. D) an increase in both imports and exports. The effect on net exports is uncertain.
In common value auctions
a. Every bidder know the value of the object being sold b. Each bidder makes the same estimate of the value of the good c. Bidders do not know the estimates of the others d. The true value of the item differs across bidders
The invisible hand principle indicates that when individuals are directed by prices determined in competitive markets, their actions will tend to promote the efficient use of resources
A) even when each market participant cares only about their own self interest rather than the overall efficiency of resource use. B) even if business firms fail to produce goods efficiently. C) only if buyers and sellers personally care about economic efficiency. D) if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.