Multiple Questions Answers

1. A form of oligopoly in which a dominant firm sets the price and all smaller firms in the industry follow the dominant firm's pricing policy is called (Points : 1) 
the Cournot model.
the contestable markets model.
a cartel.
the price-leadership model. 


2. Which one of the following is NOT a source of market failure? (Points : 1) 
externalities.
public goods.
imperfect information.
price ceilings.

3. Suppose a policy change will generate $100,000 of benefits for low-income families and $120,000 of costs for high-income families. This change can best be described as (Points : 1) 
Pareto efficient.
inefficient.
potentially efficient.
equitable. 

4. Society will produce the efficient mix of output if all firms equate (Points : 1) 
price and marginal cost.
price and average total cost.
marginal cost and average total cost.
price and marginal revenue.