From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the
A. marginal cost of waiting is less than the marginal benefit of being served.
B. management is making an assumption that other things are equal.
C. marginal cost of waiting is greater than the marginal benefit of being served.
D. management is exhibiting irrational behavior by not maximizing profits.
Answer: C
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Augustin Cournot showed (in 1838) that each of a small number of quantity-setting firms in a homogeneous-product market will sense the influence of the individual firm's own output on market price, and will offer less than the competitive quantity
as a result. Indicate whether the statement is true or false
New Keynesian inflation dynamics can account for sluggish responses of
A) real GDP to variations in aggregate supply. B) real GDP to variations in aggregate demand. C) inflation to variations in aggregate supply. D) inflation to variations in aggregate demand.
Economies of scale create __________ for existing firms, which in turn creates __________ for potential entrants
a. b and e b. problems; opportunities c. savings; costs d. losses; profits e. advantages; disadvantages
Hanak Products, a perfectly competitive firm, is experiencing profitability. Given this information, what will Hanak Products do?
a. In the short run, the firm will improve product quality. b. In the long run, the firm will create quality controls. c. In the short run, the firm will reduce its staff size. d. In the long run, the firm will increase production.