Critics of price regulation suggest that some firms
A. will lack the incentive to run their business efficiently.
B. will underestimate their costs and lead to bankruptcy.
C. will sue the federal government for damages.
D. will set their price equal to marginal cost instead of average cost.
Answer: A
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Refer to the scenario above. Which of the following is likely to happen if Rita confesses while Mike does not confess?
A) Both of them will be let free. B) Rita will be let free while Mike will be suspended. C) 10 points will be deducted from their respective scores. D) 10 points will be deducted from Mike's score while Rita will be suspended.
________ marginal opportunity cost implies that the more resources already devoted to any activity, the payoff from allocating yet more resources to that activity increases by progressively smaller amounts
A) Increasing B) Decreasing C) Constant D) Negative