If product Y is an inferior good, a decrease in consumer incomes will
A. shift the demand curve for product Y to the left.
B. make buyers want to buy less of product Y.
C. shift the demand curve for product Y to the right.
D. not affect the sales of product Y.
Answer: C
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If competing price searchers adjust their own prices on the basis of a close monitoring of their rival's prices,
A) all prices will tend to be the same, which proves prices are not competitive. B) all prices will tend to be the same, which proves sellers are not competing on price. C) each price searcher's demand curve will be indeterminate. D) prices will fluctuate regularly. E) prices will rise when costs increase but will not fall when costs decrease.
Jessica owns a company that makes pre-packaged sandwiches for convenience stores. The market price for a sandwich is $5 and Jessica is a price-taker. Her daily variable cost for making sandwiches is C(Q) = 2.5Q + (Q2/40) and her marginal cost is MC = 2.5 + (Q/20). What is the average cost of a sandwich at the quantity of sandwiches Jessica should be selling each day?
A. $1.25 B. $2.50 C. $3.75 D. $6.25
Consider the expressions T - G and Y - T - C. Which of the following statements is correct?
a. Each one of these is equal to national saving. b. Each one of these is equal to public saving. c. The first of these is private saving; the second one is public saving. d. The first of these is public saving; the second one is private saving.
Suppose that initially, the equations for demand and supply are Qd = 48 ? 4P and Qs = 4P ? 16, respectively. If the quantity demanded increases by 12 at every price (so that the demand curve shifts to the right), the equilibrium price will change from:
A. $12 to $9.5. B. $8 to $9.50. C. $8 to $12. D. $9.50 to $8.