Which of the following is an example of price stickiness?
a. Stark Inc. always lowering the price of its products even when it experiences a decrease in production costs
b. Flavors of the East, a restaurant, not change the price of its product with every change in supply and demand
c. Home Concepts, a furniture store, giving a discount on all its furniture to increase annual sales
d. Quick Connect, a cable operator, changing the price of channels according to the demand of its customers
b
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Past expenses are irrelevant to supply decisions, because
A) expenses incurred in the past never affect the opportunities available in the present. B) it is essential to avoid bankruptcy. C) no one remembers the past. D) supply decisions depend on opportunities that will have to be forgone, not opportunities already forgone.
This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope.
A state initiative requiring towns to spend at least $20 per day on litter removal would be ________ because ________.
A. efficient; it solves the inefficiency created by the negative externality B. efficient; reducing litter is socially optimal C. inefficient; the marginal cost of litter removal would exceed the marginal benefit D. inefficient; $20 is insufficient to remove all of the litter
Unemployment caused by an increase in job quits would be classified as
What will be an ideal response?
Stagflation means a
A. low rate of inflation coupled with a rate of unemployment below the natural rate. B. low rate of inflation coupled with a very high rate of unemployment. C. high rate of inflation coupled with a very low rate of unemployment. D. high rate of inflation coupled with a high rate of unemployment.