Answer the following statements true (T) or false (F)
1. Mutually-cancelling advertising by monopolistic firms tend to improve economic efficiency in the industry.
2. Advertising increases the costs of firms and could be manipulative, therefore it does not really have a positive economic effect.
3. Unlike a monopoly, an oligopoly tends to achieve allocative efficiency due to the rivalry among several firms.
4. In a natural monopoly case, the socially-optimal pricing policy rule will often result in negative economic profits for the firm.
1. FALSE
2. FALSE
3. FALSE
4. TRUE
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Parents who do not have their children immunized and attempt to benefit from other parents who did have their own children immunized are exhibiting an economic behavior known as
A) excludability. B) public rivalry. C) internalizing an external cost. D) free riding.
Supply-side economics calls for:
a. lower taxes on businesses and individuals. b. regulatory reforms to increase productivity. c. government subsidies to promote technological advance. d. All of these.