A monopoly producer of a durable good:
a. can earn even greater profits than a producer of a non-durable.
b. must consider competition from its own output decisions.
c. will have higher marginal costs than most other monopolies.
d. will not set marginal revenue equal to marginal cost.
QUESTION 2The social rate of discount is best approximated by:
a. the cost of government borrowing
b. the opportunity cost of resources taken from the private sector
c. 3 percent
d. 30 percent
e. none of the above
QUESTION 3The following is an example of risk aversion
a. those applying for a well-paid job tend to be the most qualified
b. more reckless drivers opt for cars with more safety devices
c. the contractor with the lowest bid for a is the most qualified
d. Initial Public Offerings (IPOs) seek investors when prospects look good
QUESTION 4Relative to uniform-price policy, price discrimination across segmented markets (sometimes called third-degree price discrimination):
a. always reduces welfare.
b. always increases welfare.
c. may increase welfare if total output falls.
d. may increase welfare if total output rises.
QUESTION 5Which of the following should not be counted in a cost-benefit analysis?
a. direct benefits and costs
b. real secondary benefits
c. technological secondary costs
d. pecuniary benefits
e. intangibles
QUESTION 6The following is an example of risk aversion
a. those applying for a well-paid job tend to be unqualified
b. more reckless drivers opt for cars with fewer safety devices
c. the contractor with the lowest bid for a is the most qualified
d. Initial Public Offerings (IPOs) seek investors when prospects look good
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