Evaluate the following statement in the context of business-stealing and product-variety externalities: "We have too many student apartments in this town already. Statistics show that vacancy rates average 15 percent during any given semester."
Business-stealing effect: if new entrants into the market can be profitable, then average vacancy rates are likely to rise above 15 percent.
Product-variety effect: if new entrants to the market are able to identify niche markets which are profitable (i.e., offer club rooms, pools, athletic facilities, etc.), then product variety will increase, and average vacancy rates are likely to rise above 15 percent.
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According to the law of demand, an increase in the price of a good causes
A) a rightward shift of the demand curve for that good. B) a leftward shift of the demand curve for that good. C) an upward movement along the demand curve for that good. D) a downward movement along the demand curve for that good.
In this chapter, virtue can lead to material gain and therefore it can be an important part of the social order. Evaluate this view of virtue or moral behavior. Is material gaining a sufficient motive for morality? Is moral behavior based on more than the possibility for personal gain?
What will be an ideal response?
An actress sets off a craze for wearing work boots among her fans. What factor is affecting demand?
a. consumer expectation b. consumer taste c. complements d. substitutes
If economic profits in a particular industry increase, then we would expect:
A. Resources to be diverted away from that industry B. Firms in that industry to produce less output C. Firms to enter that industry thus expanding it D. Consumers to buy less from that industry