Government-operated firms with monopoly power
a. will necessarily meet the criteria of economic efficiency, as long as price equals average total cost.
b. will always be more efficient than private firms because they do not have to make a profit.
c. are likely to be inefficient since some of the monopoly power is likely to serve the interests of the governmental managers and employees.
d. are highly responsive to changes in the preferences of individual consumers since consumers are also voters.
C
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Define opportunity cost. Given the definition of opportunity cost, explain what is meant by the statement "There is no such thing as a free lunch."
What will be an ideal response?
If a vineyard wants to raise funds to purchase a new bottling machine, it does so in the
A) output market. B) product market. C) factor market. D) alcoholic beverages market.