An ad valorem tax imposed on a monopolist will reduce the deadweight loss generated by the monopolist. Indicate whether the statement is true or false ANSWER False. The tax will further reduce the output of the monopolist contributing to a greater DWL.
Date: September 9th, 2020
The problem of autocorrelation refers to A) independent variables in a regression equation whose values are closely related to each other. B) insufficient data to estimate regression coefficient values. C) regression coefficient values which are not significantly different from zero. D) regression equation variables which exhibit a similar pattern in their values over a number […]
Date: September 9th, 2020
In 1950 there were 16 individuals contributing to Social Security for every one person collecting benefits. a. True b. False ANSWER a
Date: September 9th, 2020
What is the advantage of the government imposing an ad valorem tax over a specific tax when facing a monopoly? What will be an ideal response? ANSWER When comparing an ad valorem tax to a specific tax which generates the same revenue, the ad valorem tax is less distortionary, resulting in a smaller DWL. […]
Date: September 9th, 2020
Barometric price leadership can occur when oligopolistic firms A) compete on the basis of differentiated products. B) want to avoid price competition and violating antitrust laws. C) try to enforce cartel agreements. D) All of the above ANSWER B
Date: September 9th, 2020
A dummy variable is also called A) an approximate variable. B) a discrete variable. C) a zero-sum variable. D) an improper variable. ANSWER B
Date: September 9th, 2020
All of the following are characteristics of an oligopolistic market EXCEPT A) firms must consider the actions of their rivals. B) cartels eventually form to keep prices high. C) firms have the ability to influence prices. D) firms earn lower profits than a monopoly. ANSWER B
Date: September 9th, 2020
Which of the following is a property of an S-shaped curve that corresponds to the prospect theory value function? A) The curve passes through the reference point at the origin. B) Both sections of the curve are convex to the horizontal, outcome axis. C) The curve is symmetric with respect to gains and losses. D) […]
Date: September 9th, 2020
Suppose that all firms in a constant-cost industry have the following long-run cost curve: c(q) = 4q2 + 100q + 100 The demand in this market is given by QD = 1280 – 2p. Suppose the number of firms in the market is restricted to 80 a. Derive the supply curve with this restriction. Find […]
Date: September 9th, 2020
Sam’s company produces output with labor and capital. At the current quantities of labor and capital, the following information is obtained: the output produced by spending one more dollar on labor exceeds the output produced by spending one more dollar on capital. In the long run, is Sam minimizing costs? If not, explain how capital […]
Date: September 9th, 2020
