A British waste management company acquired two other companies that specialized in disposal of hazardous wastes even though the two companies were losing money. Planning and regulatory requirements in the United Kingdom make it difficult for firms to establish new hazardous waste landfills, and the combined companies would control most hazardous waste landfills in some parts of the country. How do the planning and regulatory requirements affect the market for hazardous waste?
A. They create a burden on the company, and so it probably will lobby to repeal them.
B. They help the merged companies because it will be expensive for other firms to enter the market to compete with them.
C. They make the market for hazardous waste disposal into a monopolistically competitive market.
D. They make the market for hazardous waste disposal into a contestable market.
Answer: B
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Marginal utility theory predicts that a rise in the price of a banana results in
A) the demand curve for bananas shifting rightward. B) the demand curve for bananas shifting leftward. C) a movement upward along the demand curve for bananas. D) a movement downward along the demand curve for bananas.
Given a tax on wages, the economic theory of labor markets would
A. predict people work less as a result of the tax. B. predict people work more as a result of the tax. C. be unable to predict whether people would work more or less as a result of the tax. D. predict higher unemployment.