A consumer consumes two normal goods, popcorn and Pepsi. The price of Pepsi rises. The substitution effect, by itself, suggests that the consumer will consume
a. more popcorn and more Pepsi.
b. less popcorn and less Pepsi.
c. more popcorn and less Pepsi.
d. less popcorn and more Pepsi.
c
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A perfectly competitive firm faces a market clearing price of $150 per unit. Average variable costs are at the minimum value of $200 per unit at an output rate of 100 units. Marginal cost equals $150 per unit at an output rate of 75 units
It can be concluded that the short-run profit-maximizing output rate is A) 75 units, at which the firm earns zero economic profits per unit sold. B) 75 units, at which the firm earns $50 in economic profits per unit sold. C) 100 units, because marginal cost equals average variable costs. D) 0 units, because price is less than average variable costs.
The "axiomic" view of bargaining is the
a. Strategic view of bargaining b. Non-strategic view of bargaining c. All of the above d. None of the above
In Figure 10.1, which of the following could cause a shift from AD0 to AD1, ceteris paribus?
A. A decrease in government spending on the education. B. An increase in consumer confidence. C. An increase in exports. D. A decrease in interest rates.
Elasticities are used to measure responses to a change in:
A. the price of a related good. B. the price of a good. C. income. D. All of these are true.