The benefit to buyers of participating in a market is measured by
a. the price elasticity of demand.
b. consumer surplus.
c. the maximum amount that buyers are willing to pay for the good.
d. the equilibrium price.
b
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In a market with a Herfindahl-Hirschman Index of 2,000, according to their guidelines will the Department of Justice challenge a merger that would increase the index by 100?
What will be an ideal response?
The RAND Health Insurance Study
a. examined cross-section data to estimate the demand function for medical care. b. was the most extensive controlled experiment in health insurance ever conducted in the United States. c. like most economic studies, was based on individual decisions in voluntarily choosing health insurance coverage. d. was flawed due to severe self-selection bias. e. was set up to study medical outcomes when individuals were free to choose the type of health coverage they desired.
The existence of a monopoly:
A. creates market inefficiencies. B. causes consumers to get less at a higher price. C. causes a reduction in total surplus. D. All of these statements are true.
A horizontal supply curve of labor implies that
a. lower wages are required to attract more employees b. higher wages are required to attract more employees c. MPP is constant d. any quantity of workers can be hired at the same wage e. the total labor cost curve is horizontal