Which of the following is a predictable, secondary effect of a sharp increase in gasoline prices?
a. Producers will increase the production of fuel-efficient cars.
b. The federal government will place a quota on the number of fuel-efficient cars for sale, thus "forcing" consumers to purchase the gas guzzling vehicles.
c. the termination of research on the cost-effectiveness of alternative fuels to power automobiles.
d. Producers will increase the production of gas guzzling vehicles.
a. Producers will increase the production of fuel-efficient cars.
You might also like to view...
The figure above shows how the PPF for cell phones and new cell-phone factories can expand. In the figure, if the economy produced 4 million cell phones using the resources efficiently, the PPF would
A) expand farther than shown in the figure. B) expand along the vertical axis and not along the horizontal axis. C) expand, but not as far as shown in the figure. D) expand evenly along both axes. E) not expand.
A buyer is said to be a price taker if she:
A) can bargain over the prices of the goods she consumes. B) can purchase any amount of a good at a fixed price provided she has the money to pay for it. C) always pays less than the market-determined price for the goods she is consuming. D) ignores the prices of related goods and considers only the price of the goods she is purchasing.
You are an analyst with a perfectly competitive firm that makes DRAM memory chips. You must manufacture the chips before you know what the demand will be. If demand turns out to be high, then producing where E[MR] = MC rather than where MRH = MC lowers your profit by an amount equal to ________.
A) area A
B) area A plus the trapazoidal area marked by E and E
C) the trapezoidal area marked by E and E
D) area B + area C
Which of the following is NOT a common characteristic of oligopoly?
A) strategic dependence among firms in the industry B) product differentiation C) barriers to entry D) marginal cost pricing.