The problem with spot exchange in the presence of specific assets is that both parties:
A. have incentives to behave opportunistically.
B. do not take advantage of the economies of scope.
C. take the risk of price fluctuations.
D. have incentives to behave as principals.
Answer: A
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The fundamental reason a single-price monopoly creates a deadweight loss is that compared to the efficient outcome, the single-price monopoly
A) raises variable cost. B) raises fixed cost. C) restricts output. D) reduces the elasticity of demand.
Temporary Assistance to Needy Families:
A. is an "unconditional" cash-transfer program B. is a conditional cash transfer program. C. is more redistributive in nature than social insurance. D. is provided long term to help people in chronic poverty.
When the crowding-out effect of an increase in government purchases is included in the analysis:
a. AD shifts left, but by more than the simple multiplier analysis would imply. b. AD shifts left, but by less than the simple multiplier analysis would imply. c. AD shifts right, but by more than the simple multiplier analysis would imply. d. AD shifts right, but by less than the simple multiplier analysis would imply.
Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of computers in the country of Oz. If the monopolist is currently producing 400 computers per year and it seeks to maximize profit, it should:Price of computers($)Quantity demanded per year5,0001004,0002003,0003002,0004001,000500
A. increase output. B. lower the price of computers. C. continue producing 400 units per year. D. decrease output.