Producer surplus is the difference between the lowest price a firm is willing to accept for a product and the price it actually receives for the product.
Indicate whether the statement is true or false
Ques. 2The health care system in Japan is referred to as ________, under which every resident of Japan is required to enroll in either a private, or the government-provided, health insurance program.
A) an out-of-pocket system B) a single-payer health care system
C) a universal health insurance system D) socialized medicine
Ques. 3What is utility and how do we use the concept of utility to describe a consumer's preferences?
What will be an ideal response?
Ques. 4Suppose that an industry has a Herfindahl-Hirschman index of 2,000 . Two firms have proposed a merger. Firm A has a current market share of 9 percent. Firm B has a market share of 5 percent.
Will the Justice Department challenge the merger? Explain.
Ques. 5An externality refers to economic events outside a market.
Indicate whether the statement is true or false
Ques. 6Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is considering setting up his business as a corporation. What is one advantage to Jeremy of setting up his business as a corporation?
A) By setting up the business as a corporation, Jeremy would have both ownership and control over the business.
B) By setting up the business as a corporation, Jeremy would not face double taxation.
C) By setting up the business as a corporation, Jeremy would have the ability to share risk with shareholders.
D) All of the above would be advantages of setting up his business as a corporation.
Ques. 7What is meant by the prisoners' dilemma? Do the players in the prisoner's dilemma game have a dominant strategy?
What will be an ideal response?
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