Consider;

Select one:

a. it would not matter because competition has very little affect in a market economy.

b. A company that is in that industry may have and exert more economic power.

c. Resources will be allocated more efficiently

d. Prices will most likely be lower in that industry

Question 2

Question text

The Sherman Anti-Trust Act

Select one:

a. Gave monopolies a legal right to exist and grow

b. Gave all unions money to pay their members

c. Was a governmental attempt to promote and encourage competition.

d. Created new policies to ensure that workers' compensation was given to all workers

Question 3

Question text

One reason the government is involved in the U.S. economy is to

Select one:

a. regulate industries in which a monopoly is in the public interest

b. encourage monopolies

c. discourage competition

d. promote the development of negative externalities

Question 4

Question text

Under perfect competition

Select one:

a. The buyers are usually uninformed

b. Market equilibrium sets the price of goods and services

c. The government determines how much of a good to produce.

d. The seller tends to spend much effort in advertising its product because of product differentiation.

Question 5

Question text

The Clayton-Anti Trust Act

Select one:

a. Was never passed

b. Helped monopolists grow wealthier

c. Was passed to lower the taxes on the most wealthy Americans

d. Outlawed price discrimination

3. Special Cases of the CES production function (optional): The Constant Elasticity of Substitution (CES) production function is q = f (K, L) = A (ak + (1 -0) 1-7)-7 where all the parameters are positive constants. (a) Show that as y - 0+, the CES production function q = f(K, L) converges to the Cobb-Douglas production function q = f(K, L) = AKOLI-a. (b) Show that as y - co, the CES production function converges to the Leontief produc- tion function q = f(K, L) = A . min { K, L}.7. The cost function C = q(v= + wi)= arises from: a. a Cobb-Douglas production function. b. a CES production function. c. a fixed proportions production function. d. a translog production function.Consider a CES production function given by Q = (0.5 410.5) 2 (a) The elasticity of substitution for this production function is A (b) This production function exhibits Ay (increasing/ decreasing /constant) returns to scale. A firm's production function is O = 543 K3 with MPK = L K - and MPL = 10 ) L- 3KS. (a) This production function exhibits (constant/ increasing/ decreasing) returns to scale. (b) The elasticity of substitution for this production function isConsider the Constant Elasticity of Substitution (CES) production function: q = f (k, l) = [kP + 1P]e, for p S 1, p # 0, and y > 0. a. (10 points) Show that the CES production function is homothetic. b. (5 points) Show that the elasticity of substitution, o, is equal to1. Explorations of the CES Production Function: This question asks you to analyze labor demand if the production function is of the CES-type. This is arguably the most popular specification of the production function in labor economics and is a generalization of the Cobb-Douglas production function. It nests, in one function, the case of perfect substitutes, the case of perfect complements, the Cobb-Douglas case, and many cases in between. The simplest version of this production function is as follows: F( L K) = D+ K]# where p