ALC, Inc., has, in recent years, opened large markets of new customers, experienced strong competition from substitutes, and survived a nasty national recession. When the chief economist statistically estimated the company's product demand using data from the past five years, she found a statistically significant positive (direct) relationship between price and quantity. What according to you led to this finding?
What will be an ideal response?
The chief economists estimate suffers from a classic identification problem. Instead of estimating a stable demand curve where prices change because of supply shifts, this economist has failed to control for shifts in the demand curve due to changes in the number of customers, changes in the intensity of competition, and changes in income.
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There are two grocery stores in the new neighborhood that you have moved into. Because you did not know which store is better, you decided to go to the one that is relatively crowded. Your behavior is an example of ________
A) herding B) anchoring C) signaling D) sniping
The less freedom young mothers have to work outside the home, the
a. more elastic the supply of labor will be. b. less elastic the supply of labor will be. c. more horizontal the labor supply curve will be. d. larger is the decrease in employment that will result from a tax on labor.
The table below shows the number of umbrellas and bushels of corn produced in the United Kingdom and the rest of the world per labor hour. The United Kingdom has a comparative advantage in the production of ProductivityIn the United KingdomIn the Rest of the WorldUmbrellas per labor hour0.251.00Bushels of corn per labor hour0.500.67
A. only corn. B. neither umbrellas nor corn. C. only umbrellas. D. both goods.
A firm can be the only firm in an industry and still not be a monopoly if
A. the firm is not making economic profits. B. the firm is not large. C. the firm produces a good that is not considered a necessity. D. the firm produces a good similar to a good in another industry.