The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:
A. price.
B. expectations.
C. preferences.
D. incomes.
Answer: A
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In perfect competition, no individual producer can influence price because
a. each contributes an insignificant amount to total supply. b. they are ignorant of the market price. c. it is set by monopolists. d. it is regulated by the government.
Which is a possible solution to a divisional conflict regarding a decision
a. change the division that has the authority to make the decision b. change the information flow so that the decision maker is better informed c. change the evaluation and reward scheme governing the decision maker d. all of the above
Dan owns an autographed copy of a Brittany Spears CD that he values at $100. If he sells the CD at the garage sale he's planning to hold in a few weeks, it will be sold to a buyer with a reservation price of $175. If he sells it on eBay, it will be sold to a buyer with a reservation price of $500. eBay will charge Dan $50 to auction the CD, which just covers eBay's opportunity cost of running the auction. Relative to selling the CD at his garage sale, auctioning the CD on eBay will lead:
A. total economic surplus to increase by $100. B. total economic surplus to increase by $500. C. to no change in total economic surplus. D. total economic surplus to increase by $275.
If a production process generates pollution, then a competitive market will
A) produce more of the good than is socially optimal. B) produce less of the good than is socially optimal. C) produce the socially optimal quantity of that good. D) produce zero output.