Which of the following market structures will have higher prices in the long run than perfect competition, ceteris paribus?
A. Oligopoly and monopoly, but not monopolistic competition.
B. Monopolistic competition and monopoly, but not oligopoly.
C. Monopoly, but not oligopoly or monopolistic competition.
D. Monopolistic competition, monopoly, and oligopoly.
Answer: D
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Opportunity cost is:
A) zero for the use of a free combo meal offer. B) the dollar payment for a product. C) the benefit derived from a product. D) the value of the best alternative forgone in making any choice.
Which of the following correctly describes the result of a price increase for an inferior good?
A) The substitution effect causes the demand for the good to decrease; the income effect causes the demand for the good to increase. B) Both the substitution effect and the income effect cause the consumer to buy less of the good. C) The substitution effect causes the demand for the good to increase; the income effect causes the demand for the good to decrease. D) The substitution effect causes the consumer to buy less of the good and the income effect causes the consumer to buy more of the good.