QUESTION 6

Which one of the following is NOT a way to resolve externalities:

a. Coasean bargaining

b. Pigouvian taxes

c. Social preferences

d. Robinson Crusoe model

QUESTION 7

A firm in which type of market structure can charge the largest markup:

a. Perfect competition

b. Monopolistic competition

c. Oligopoly

d. Monopoly

QUESTION 8

Most firms would like to:

a. Increase markup

b. Decrease markup

c. Keep markup stable

d. Depends on goals of firm

QUESTION 9

What gives monopolistically competitive firms their pricing power?

a. Large number of buyers and sellers

b. Free entry and exit

c. Product differentiation

d. Perfect information