Public policy responses to monopolies:
A. ease the effect of monopoly power on consumers.
B. aim to break up existing monopolies.
C. prevent new monopolies from forming.
D. All of these statements are true.
Answer: D
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What is the standard deviation of the payoff from an investment that yields $5,000 with a probability of 0.15 and $500 with a probability of 0.85?
A. $0 B. $2,581,875 C. $42.50 D. $1,606.82
The federal minimum hourly wage rate was established in
A. 1920. B. 1938. C. 1950. D. 1973.
We often witness prices of water, gasoline and construction materials surge in a region just before a major storm hits. Some call this "price gouging." In the economic way of thinking, however, those higher prices are caused by
A) an increase in supply and an increase in demand. B) an increase in supply and a decrease in demand. C) a decrease in supply and an increase in demand. D) a decrease in supply and a decrease in demand. E) practices that are not connected to underlying supply and demand conditions.
Which of the following activities create a negative externality?
A) cleaning up the sidewalk on your block B) graduating from college C) keeping a junked car parked on your front lawn D) repainting the house you live in to improve its appearance