DeBeers' diamond monopoly results from
A. a government franchise.
B. ownership of a scarce factor of production.
C. economies of scale.
D. a patent.
Answer: B
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The height of the demand curve at any quantity indicates
a. total expenditure on the good or service b. total revenue to the seller of the good or service c. whether the price is fair or not d. how much that particular unit is worth to the person who buys it e. how much the person who buys that unit actually pays for it
If public goods were marketed like private goods, then
A. People would avoid paying for these goods. B. Public goods would be efficiently produced. C. Market failure would not occur. D. Society would be closer to achieving the optimal mix of output.
The reason that this scenario perfectly illustrates the problem of "moral hazard" in particular is that
Suppose that engineers designed a revolutionary american football helmet that greatly increased the amount of protection for players' heads. Unfortunately however, after the new helmets were introduced, there was an INCREASE in head injuries! This happened because players started taking greater risks on the field due to the belief that the new helmets would protect them. A. A change in policy (i.e., the helmets) led to more risky behavior after the new policy was introduced. B. Football players are usually "risk seeking" individuals by nature. C. There was no conceivable way for the engineers to (scientifically) demonstrate that the new helmets were safer than the old ones. D. All of the above
Figure 9.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of the used bikes are lemons (low quality), how much will they be willing to pay for a used bike?
A. $50 B. $80 C. $125 D. $200