Harry owns a hot dog stand near campus. When a pizza stand opens next to Harry's hot dog stand, he finds that he has to lower the price of his hot dogs in order to attract the same number of customers. Explain why this is the case
Customers view the hot dogs and pizza as substitute goods. The demand for Harry's hot dogs falls as some
customers choose pizza instead of hot dogs.
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Suppose Hannah's Cookies sells cookies in a perfectly competitive market. It sells 200 cookies per week at a price of $2 per cookie. If it decides to increase the price to $2.50 per cookie, then its sales _____
a. will decrease by 150 cookies per week b. will decrease by more than 200 cookies per week c. will drop down to zero d. will decrease by 100 cookies per week
The unemployment that results from the process of matching workers and jobs is called frictional unemployment
a. True b. False Indicate whether the statement is true or false
To decrease the money supply, the Fed may sell government securities or lower taxes
Indicate whether the statement is true or false
A firm estimates its long-run production function to beQ = -0.0075K3L3 + 12K2L2Suppose the firm employs 12 units of capital. Average product when 10 units of labor are employed is
A. 12,248 B. 15,984 C. 30,672 D. 14,287 E. 13,142