A. private costs, private benefits
B. private costs, social costs or benefits
C. social costs, social benefit
D. insiders, outsiders
Market
Markets sometimes fail to exist because of……..?
A. externalities
B. the free-rider problem
C. a and b
D. a and c
If the consumption of good by one person does not reduce the quantity available by others and nobody can be easily excluded from consumption, we are referring to a ?
A. Private good
B. merit good
C. public good
D. abundant good
Except for taxes to offset …… taxes are ……?
A. imperfect competition popular
B. externalities , distortionary
C. inequality , a first best option
D. poor health, unnecessary
Taxes creates a wedge between the sales price and purchase price that prevents the price system equating …. and ……?
A. marginal costs, marginal benefits
B. demand, supply
C. marginal cost, marginal revenue
D. marginal cost, average cost
The effect of a tax to offset a negative externality will be to …. price and …… quantity?
A. reduce , reduce
B. increase, increase
C. increase, reduce
D. reduce, increase
The social costs of monopoly power arises because ?
A. marginal cost is set equal to marginal revenue
B. price is less than marginal cost
C. marginal consumer benefit is less than marginal revenue
D. there is too little output at too high a cost
If two firms doing the same thing in the same industry join together, this is known as a ?
A. vertical merger
B. horizontal merger
C. conglomerate merger
D. hostile takeover
The problem posed by a natural monopoly is that it faces a ….. This means that …….?
A. increasing average cost curve, marginal cost lies above average cost
B. increasing average cost curve, marginal cost lies below average cost
C. decreasing average cost curve marginal cost lies above average cost
D. decreasing average cost curve, marginal cost lies below average cost
If an increase in the price of blue jeans leads to an increase in the demand for tennis shoes, then blue jeans and tennis shoes are ?
A. Complements
B. inferior goods
C. normal goods
D. none of these answers
E. Substitutes