Of the following, ________ is the best example of an oligopolistic industry.
A. soybean farming
B. automobiles production
C. electric power
D. retail grocery
Answer: B
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After OPEC raised the price of crude oil in the 1970's, which of the following was the most important reason that there were shortages of gasoline? a. Americans drove large, gas-guzzling vehicles
b. The increase in the price of crude oil by OPEC. c. The effects of a price ceiling on gasoline prices imposed by the US government. d. Increased commuting times resulting from traffic congestion.
Imagine Tom's annual salary as an assistant store manager is $30,000, he owns a building that rents for $10,000 yearly, and his financial assets generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. Tom should:
A. keep his shop going because he's earning a healthy $35,000 a year. B. keep his shop going because he's earning $5,000 more than his salary before. C. close his shop and go back to what he was doing before with his time and assets, because it was earning him $6,000 more than he's earning now. D. None of these is true.
The government provides public goods because
a. private markets are incapable of producing these types of goods. b. free-riders make it difficult for private markets to supply the socially optimal quantity. c. markets are always better off with some government oversight. d. external benefits will accrue to private producers.
Adam Smith in The Wealth of Nations argued that:
a. society works best when people act unselfishly b. society works best when people act in their own self interest c. society works best when people act as if they are invisible to others d. the social order needs the guidance of the government's visible hand e. none of the above