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 […]
Date: September 9th, 2020
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
Date: September 9th, 2020
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
Date: September 9th, 2020
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
Date: September 9th, 2020
According to the benefit principle, the Social Security payroll tax is _____. According the ability-to-pay principle, the Social Security payroll tax is _____. a. equitable; equitable b. equitable; inequitable c. inequitable; equitable d. inequitable; inequitable ANSWER b
Date: September 9th, 2020
Suppose the market supply curve for wheat is shown in the above figure. Calculate the producer surplus when price is $2 per bushel. If legislation mandates that the price be $1 per bushel, what is the resulting loss in producer surplus? What will be an ideal response? ANSWER At a price of $2, producer […]
Date: September 9th, 2020
Which of the following is an example of pure bundling? A) a pair of pants B) a pizza and beer lunch combo C) an automobile D) All of the above. ANSWER A
Date: September 9th, 2020
Regression analysis can best be described as A) a statistical technique for estimating the best relationship between one variable and a set of other selected variables. B) a statistical technique for determining the true values of variables. C) a statistical technique for creating functional relationships among variables. D) None of the above ANSWER A […]
Date: September 9th, 2020
The income elasticity for most staple foods, such as wheat, is known to be between zero and one. a. As incomes rise over time, what will happen to the demand for wheat? b. What will happen to the quantity of wheat purchased by consumers? c. What will happen to the percentage of their budgets that […]
Date: September 9th, 2020
In the long run, the most helpful action that a monopolistically competitive firm can take to maintain its economic profit is to A) continue its efforts to differentiate its product. B) raise its price. C) lower its price. D) do nothing, because it will inevitably experience a decline in profits. ANSWER A
Date: September 9th, 2020
