A critical assumption in economist A. P. Lerner's theory explaining why society's total utility is maximized with income equality is
a. there is no "level playing field" in people's choice of employment
b. people have identical utility functions
c. the rich earn their income by exploiting the poor
d. people have equal skills if given equal opportunity
e. the law of diminishing marginal utility does not apply to money
B
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Which of the following is the best explanation for why the price of gasoline increases during the summer months?
A) Oil producers have higher costs of production in the summer. B) Sellers have to earn profits during the summer to cover losses in the winter. C) There is increased driving by families going on vacation. D) There is less competition among oil refineries in the summer. E) The number of gas stations open 24 hours a day rises in the summer months and so the price must rise to cover the higher costs.
When Dave in Detroit, MI buys stock in Ford Motor Co., NCO:
A. increases. B. is unaffected. C. decreases. D. is zero.
Under monopoly, resources are allocated as efficiently as in perfect competition.
Answer the following statement true (T) or false (F)
The key element in preserving a monopoly is
A. government subsidy of critical enterprises. B. keeping potential rivals out of the market. C. guaranteeing availability of substitute products. D. increased advertising expenditure.