Sue consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a Mountain Dew increases
A) Sue's demand curve for sub sandwiches will shift rightward.
B) Sue will move downward along her demand curve for Mountain Dews.
C) Sue will move upward along her demand curve for Mountain Dews.
D) Both answers A and C are correct.
C
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If a market is NOT in equilibrium, then which of the following is likely to occur?
A) The demand curve will shift to bring the market to equilibrium. B) The supply curve will shift to bring the market to equilibrium. C) The price will adjust to bring the market to equilibrium. D) Both A and B are correct.
The first step toward reducing negative externalities or maintaining them within acceptable bounds, according to the argument of the textbook, is
A) constructing an exhaustive list of all negative externalities. B) creating a central planning authority for negative externalities. C) cultivating such civic virtues as courtesy and tolerance. D) halting population growth. E) prohibiting activities whose costs are greater than their benefits.
Compared to the profit-maximizing equilibrium of a natural monopoly, a price cap regulation ________ the firm's price and ________ the firm's output
A) raises; decreases B) lowers; increases C) raises; increases D) lowers; decreases
Imagine Tom's annual salary as an assistant store manager is $30,000, he owns a building that rents for $10,000 yearly, and his financial assets generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. What are Tom's economic profits?
A. $35,000 B. $50,000 C. $24,000 D. $6,000