Which economic principle accounts for the fact that all-you-can-eat buffet restaurants can be profitable?
A) the law of demand
B) the principle of diminishing marginal utility
C) the principle of comparative advantage
D) the law of supply
Answer: B
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The demand curve for pizza in Foodieland is vertical. If a tax is imposed on each pizza bought, ________
A) the burden of the tax will fall entirely on the buyers B) the burden of the tax will fall entirely on the sellers C) the tax incidence on the sellers will be higher than that on the buyers D) the deadweight loss due to taxation will be large
Suppose Clem's Chemical Company wants to increase its total revenue. If there are few substitutes for Clem's Chemicals
A) Clem should increase the price of his chemicals. B) Clem should decrease the price of his chemicals. C) the demand for chemicals is elastic. D) Clem will not be able to change the price of his chemicals.
Arranging the four market structures according to the number of firms in the industry, from fewest to the most, would be
a. monopoly, monopolistic competition, oligopoly, perfect competition b. monopoly, perfect competition, oligopoly, monopolistic competition c. monopoly, oligopoly, monopolistic competition, perfect competition d. oligopoly, monopoly, monopolistic competition, perfect competition e. perfect competition, monopolistic competition, oligopoly, monopoly
Externalities that occur in market transactions and affect parties beyond those involved in such transactions are known as _____
a. spillovers b. negative externalities c. deadweight losses d. shortages