When a car importer in the UK buys cars from Toyota made in Japan she pays with
A. gold.
B. dollars.
C. pounds.
D. yen.
D. yen.
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The cost of producing an additional unit of a good or service that is borne by the producer of that good or service is the
A) marginal external cost. B) marginal private cost. C) marginal social cost. D) None of the above answers is correct.
The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, what will happen if the government offers a $30 subsidy to airlines that serve this route?
A) Both firms will enter profitably. B) Firm A will decide not to enter since firm B will. C) Firm B is still better off not entering. D) Neither firm will have a dominant strategy.
The California cigarette market consists of the following supply and demand curves:
QD = 150 - 20p QS = 40p where Q is the number of packs of cigarettes per year (in millions!), and p is the price per pack. a. Compute the market equilibrium price and quantity. b. Calculate the price elasticities of each curve at the equilibrium price/quantity. c. California imposes a tax on cigarettes of $0.90 per pack. Suppliers pay this tax to the government. Compute the after-tax price and quantity. How much do suppliers receive net of tax (per pack)? d. Demand for cigarettes is generally more elastic over longer periods of time as consumers have more time to kick the habit. What does this imply about the tax incidence in the long run as compared to the short run?
When consumers have asymmetric information and when search costs and the number of firms are large, a single-price equilibrium in a competitive market
A) is impossible. B) occurs when price equals average cost. C) occurs when price equals marginal cost plus the search cost. D) occurs when the price is the price a monopoly would set.