If the demand curve for a life-saving medicine is perfectly inelastic, a reduction in supply will cause the equilibrium price to:
a. rise and the equilibrium quantity to fall

From 2015 to 2016, the overall price level rose from 200 to 220. Over the same period, tuition rates at the local community college rose from $100 to $115 per credit hour. What can be concluded from the rise in tuition relative to overall inflation?

a. Tuition rates increased at the same rate as inflation. b. Tuition rates increased at a slower rate than inflation. c. Tuition rates increased at a faster rate than inflation. d. Tuition rates and inflation cannot be compared with the numbers given.

If all of the divisions in a vertically integrated firm are owned by the same company, why is it possible that asymmetric information problems can lead to inefficient outcomes in vertically integrated firms?

A) Divisions that produce parts for other divisions have effective monopoly power, so the outcome for these division must be inefficient. B) This outcome is no longer possible in the U.S. after passage of the Sarbanes-Oxley law. C) Vertically integrated firms are often subject to antitrust investigations, so managers routinely limit the amount of information that flows between divisions. D) Managers in some divisions may not have information about production capacities or costs in related divisions.