Advocates of steel tariffs to protect American steel firms realize that when imposing such tariffs the gains of firms are outweighed by the losses to consumers. This implies that A) such advocates value producer surplus more than consumer surplus. B) such advocates want to help consumers. C) such advocates value consumer surplus more than producer […]
The coefficient of a linear regression equation indicates A) the change in the dependent variable relative to a unit change in the independent variable. B) the change in the independent variable relative to a unit change in the dependent variable. C) the percentage change in the dependent variable relative to a unit change in the […]
The agency problem can be avoided if A) the firm is not subject to regulation by a government agency. B) the manager and owner can manipulate reported profit. C) the firm has positive profits. D) the goals of the owner and manager are aligned. ANSWER D
Rent seeking is A) when consumers search for the lowest possible rent on housing. B) illegal in the U.S. C) what regulators do to improve their chances of getting jobs in the regulated industry after they leave government service. D) where firms expend effort and money to profit from government actions. ANSWER D
If a regression coefficient passes the t-test, it means that A) the regression equation is valid. B) the regression coefficient is significantly different from zero. C) the regression coefficient can be used for forecasting. D) the regression coefficient should be included in the regression equation. ANSWER B
If the entire Social Security payroll tax were paid by the employers _____ a. the workers would be better off b. labor costs would increase c. the price of all non-labor goods would rise d. the employees after-tax wage would be unaffected ANSWER d
Deterring entry might require a firm to A) price their product closer to the competitive price than to the monopoly price. B) price their product closer to the monopoly price than to the competitive price. C) drop output almost to zero to show the consumers “who’s boss.” D) drop price almost to zero to get […]
Which of the following is an example of mixed bundling? A) a suit jacket B) dinner at a buffet restaurant C) a desktop computer and monitor D) All of the above. ANSWER C
If manager performance is easily observable then A) profits will be maximized for the firm. B) the owner can directly reward the manager. C) the manager will attempt to manipulate the reported profit. D) the firm’s stock price will go up. ANSWER B
Regulatory capture is where A) governments take over monopolies through use of regulation. B) firms impose barriers to entry on regulators. C) regulators of an industry look out for the industry instead of society. D) the government taxes the profits of monopolies such that all producer surplus goes to the government. ANSWER C
