In the long-run equilibrium in a perfectly competitive market, the firms produce at the ________ possible average total cost and the price equals the ________ possible average total cost.
A) highest; highest
B) lowest; lowest
C) highest; lowest
D) lowest; highest
Ques. 2Tying arrangements are always held to be illegal under U.S. antitrust law.
Indicate whether the statement is true or false
Ques. 3The more that Clayton earns, the higher is his average tax rate. Clayton faces a ________ income tax.
A) regressive
B) proportional
C) progressive
D) flat-rate
Ques. 4If buyers cannot assess the quality of used cars but there are warranties for cars,
A) too few lemons are sold.
B) too many good used cars are sold.
C) good used cars are sold at a higher price than lemons.
D) there is an adverse selection problem.
Ques. 5The larger the portion of a person's total budget spent on a good, the more inelastic the demand for the good.
Indicate whether the statement is true or false
Ques. 6The possibility that the managers of a corporation might not always act in the best interest of its owners is an example of the principal-agent problem.
Indicate whether the statement is true or false
Ques. 7Consumer surplus ________.
A) equals total revenue minus marginal cost
B) is maximized when the market outcome is efficient
C) equals total revenue minus opportunity cost
D) plus producer surplus is maximized when resources are used efficiently
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