The Federal Government, in Order to Fund Expanded Health Care

question 60

Multiple Choice

The federal government, in order to fund expanded health care, imposes a lump-sum tax on all business property.Profit-maximizing firms that stay in business will respond by

• A)raising prices to pay the tax.
• B)cutting output to reduce costs.
• C)lowering prices to stimulate demand.
• D)doing nothing.

Evaluate the economic concerns and efficiencies related to monopolies, including resource allocation and consumer impact.

Examine the role of government in regulating monopolies to prevent abuse of monopoly power.

Calculate profit-maximizing output and price decisions for monopolies using given data.

Understand the implications of breaking up natural monopolies for costs, prices, and efficiency.

---

Definitions:

Knowledge

Information, understanding, or skill that one gets from experience or education.

Skills

Specific abilities or competencies that individuals possess or acquire, which enable them to perform tasks effectively.

Firm-Specific Human Capital

The unique knowledge, skills, and abilities employees develop that are valuable to a particular organization but not necessarily transferable.

Generic Human Capital

Refers to the broad and universally applicable skills, knowledge, and experience that individuals possess, which can be transferred and applied across various industries and roles.