New airplanes, which normally consume less fuel per passenger-mile, become less efficient for commercial airlines to purchase and use as
A) average flight distances lengthen.
B) fewer non-stop flights are scheduled.
C) fuel prices fall.
D) the demand for airline travel increases.
E) the price of new airplanes falls.
Ans: C) fuel prices fall.
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Which of the following gives rise to a pecuniary externality?
A) Excessive consumption of alcohol leading to ill health B) Sudden increase in the demand for diamonds leading to an increase in their price C) Deforestation leading to the extinction of many species D) Globalization leading to the displacement of indigenous workers
With successful collusion that maximizes the total profits of the firms in the market,
a. the market demand curve shifts leftward b. monopoly power allows the sellers to charge whatever price they want for their joint output level c. each firm faces a horizontal demand curve for its output d. each firm can sell as much output as it chooses at the price set by the cartel e. the pricing decision is constrained by the market demand curve