In an unfunded pension system where current contributions are paid out to current beneficiaries, the total amount of funds available to invest _____ and the interest rate _____. a. falls; falls b. rises; rises c. falls; rises d. rises; falls ANSWER c
Date: September 9th, 2020
Mergers harm society. A) True. Firms merge to avoid antitrust laws and increase their prices. B) Maybe. It depends on whether the effect on prices is larger from reducing competition or increasing efficiency. C) False. Firms gain economies of scale and pass the price savings on to their customers. D) True. Total surplus is reduced […]
Date: September 9th, 2020
Since the Social Security benefits of retirees are a function of the taxes paid by others, it is easy to predict that _____. a. older voters are likely to vote against higher taxes in exchange for higher benefits b. older voters are likely to vote for higher taxes in exchange for higher benefits c. older […]
Date: September 9th, 2020
A one-tail test of significance would be used to determine whether A) demand for a good is price elastic. B) two goods are substitutes for each other in supply. C) two goods are unrelated to each other in demand. D) supply of a good is price inelastic. ANSWER B
Date: September 9th, 2020
The equivalent variation is always less than the consumer’s income Indicate whether the statement is true or false ANSWER True . The amount a person will pay to prevent a price change (EV) cannot exceed their available income.
Date: September 9th, 2020
An incumbent monopolist producing more output than necessary might be able to keep potential rivals from entering A) by flooding the market with products below its marginal cost in the short run. B) if learning by doing reduces marginal cost. C) if the long-run marginal cost can be lowered below the potential entrant’s short-run marginal […]
Date: September 9th, 2020
Antitrust laws seek to prevent actions that harm society such as A) price discrimination. B) refusal to deal. C) predatory pricing. D) All of the above. ANSWER D
Date: September 9th, 2020
Convenience stores with gas stations tend to sell an essentially identical variety of products and services. Yet this is generally considered to be a monopolistically competitive industry selling differentiated products. How can this be considered a differentiated product? ANSWER These stores are differentiated by location.
Date: September 9th, 2020
The t-statistic is computed by A) dividing the regression coefficient by the standard error of the estimate. B) dividing the regression coefficient by the standard error of the coefficient. C) dividing the standard error of the coefficient by the regression coefficient. D) dividing the R2 by the F-statistic. ANSWER B
Date: September 9th, 2020
Suppose a victim of an accident brings the injurer to court. You are hired to determine the amount of damages. You are specifically asked to find a measure of the amount of money needed to restore the victim to the position he was in prior to the accident. What welfare measure will provide the most […]
Date: September 9th, 2020
