Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows
a. True
b. False
Indicate whether the statement is true or false
True
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A regional airline owns 10 aircraft and employs 20 pilots. The airline makes an average of three trips per day with each of its 10 aircraft. The aircraft and their ground crews are idle part of the day. Minimum rest requirements for its pilots mean that if the airline wants to increase its flights, it must hire more pilots. The decision to hire more pilots is:
A. a short-run decision because the number of pilots is being increased; if the number of ground crew were decreased instead, it would be a long-run decision. B. a short-run decision because the number of aircraft is held constant while the labor input is changed. C. a long-run decision because customers will become accustomed to the new flight schedule. D. a long-run decision because hiring pilots will increase revenues over a long period of time for the airline.
Many developing countries face a balance of payments constraint because:
A. they fail to implement exchange rate policy correctly. B. they hold too few international reserves. C. they hold too many international reserves. D. the IMF forces them to adopt policies that are counterproductive.
Stereo Sound Unlimited has a monopoly over the installation of surround sound systems. If Stereo Sound Unlimited?s total revenue from installing 10 sound systems is $20,000 and its total revenue from installing 11 sound systems is $19,000, what is the marginal revenue of the eleventh sound system?
A. -$2,000 B. -$1,000 C. $2,000 D. $3,800
The case against advertising includes the assertion that advertising
A. keeps firms from spending huge sums of money to create artificial differences among goods. B. ensures high quality and efficient production. C. provides consumers with valuable information about product availability, quality, and price. D. decreases competition by increasing barriers to entry of new firms into an industry.