A firm that is vertically integrated
A) participates in more than one successive stage of production.
B) has higher profits than firms that are not vertically integrated.
C) produces all of its own inputs.
D) relies on other firms to market its products.
A
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A competitive, unregulated market would
A) produce too much pollution because pollution is an external cost. B) produce too little education because education has an external benefit. C) fail to achieve equilibrium if there are externalities present. D) Both answers A and B are correct. E) Both answers B and C are correct.
Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is:
A. not an economic problem because it's an hour that Chris has no matter what he does. B. not an economic problem because neither activity costs money. C. an economic problem because the tuition Chris pays covers the cost of both the gym and the library. D. an economic problem because Chris has only one hour, and engaging in one activity means giving up the other.
What pitfall is linked with adding up individual behaviors?
a. rationality b. the fallacy of composition c. correlation and causation confusion d. the economic problem
Which of the following situations will arise in the domestic market following the imposition of an import quota?
A. imports increase, domestic production decreases, prices decrease B. imports decrease, domestic production increases, prices decrease C. imports decrease, domestic production decreases, prices increase D. imports decrease, domestic production increases, prices increase