question
A firm with market power can:
answer
set price above marginal cost
question
Which of the following is not a criticism of firms that act as monopolies?
answer
They reduce all allocative efficiency through perfect discrimination
question
Government attempts to prohibit monopolization of a market are known as:
answer
antitrust regulation
question
Government regulation of the prices charged by natural monopolies is an example of:
answer
economic regulation
question
A natural monopoly exists when, throughout the range of the market demand:
answer
There are economies of scale.
question
If a regulator sets the price equal to the natural monopolist's marginal cost:
answer
the monopoly will experience a loss
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If government regulators force a natural monopoly to produce where price equals marginal costs, the monopoly will earn:
answer
negative economic profit
question
Production by a monopoly would result in the socially optimal allocation of resources if:
answer
price is set equal to marginal cost
question
To calculate the Herfindhal index:
answer
Square the market shares of all firms in the industry and then add them
question
Antitrust laws attempt to promote competition by controlling:
answer
market structure and conduct
question
When consumption of a good or service produces benefits or costs that are not reflected in the market price of the good, this is known as:
answer
Externality.
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All of the following are examples of negative externalities except:
answer
your roommate going on a diet.
question
Property rights can be defined and enforced:
answer
by government, by informal social actions, and by ethical norms
question
If periodic use of a resource can be continued indefinitely, that resource is said to be:
answer
renewable
question
Pollution arises because
answer
the atmosphere is an open-access resource.
question
Pollution and other negative externalities arise because:
answer
there are no enforceable property rights to open-access resources.
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The common pool problem:
answer
is one in which resources to which access is unrestricted will tend to be overused.
question
Open-access resources tend to be:
answer
overused
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When a resource is an open-access resource:
answer
No one owns it
question
To solve the common pool problem in fishing, governments can ___, or ___.
answer
Impost a depletion tax ; restrict output
question
In a market economy, income depends mostly on:
answer
Productivity
question
If income were distributed solely according to marginal productivity:
answer
Some individuals would not receive any income.
question
Census data on the income distribution among families in the United States in recent years show:
answer
A rising share earned by the top fifth and a declining share earned by the bottom fifth.
question
The income distribution in less-developed nations tends to be:
answer
more uneven than typical in developed countries
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A fair distribution of income for the U.S. economy is:
answer
A normative economic question
question
When family incomes are ranked from lowest to highest, the middle income is known as the:
answer
Median income
question
Which of the following statements about income and education in the United States is correct?
answer
At every age, average earnings are higher for those with more education
question
The official poverty level in the United States:
answer
is defined by the Department of Agriculture and based on food costs.
question
Poverty is:
answer
a relative concept
question
A major difference between social insurance and income assistance programs is that:
answer
benefits from social insurance programs are related to a worker's contributions to the program, whereas benefits from income assistance programs are not
question
Most U.S. imports are:
answer
Manufactured goods
question
Which country is the United States largest trading partner?
answer
Canada
question
In determining comparative advantage, cost is measured in terms of:
answer
opportunity forgone
question
International trade is most likely to occur whenever:
answer
Each of the trading nations gains from trade.
question
The basis of the benefits of specialization is:
answer
Comparative advantage
question
Absolute advantage:
answer
means that a country can produce more of two goods than another can
question
The rate at which two countries trade on good for another:
answer
is known as the terms for trade
question
Which of the following is true?
answer
International trade makes it possible for a country's consumption possibilities to exceed its production possibilities
question
Differences in resource endowments are differences in:
answer
The quality and quantity of resources available in different nations
question
The world price of a good is:
answer
The price at which it is traded internationally.
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