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Assume that Figure 4-4 shows demand for soda. An increase in the price of bottled water will change demand from
A. D1to D2.
B. D2to D1.
C. D3to D2.
D. D3to D1.
Answer: A
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A legal barrier is created when a firm
A) has economies of scale, which allow it to produce at a lower cost than two or more firms. B) is granted a public franchise, government license, patent, or copyright. C) produces a unique product or service. D) produces a standardized product or service. E) has an ownership barrier to entry.
As the price of cell phones fell during the last decade, consumers' total expenditures on cell phones increased. If the demand curve for cell phones did not shift, this fact means that the demand for cell phones
A) must have shifted leftward. B) must be upward sloping. C) is elastic. D) is inelastic.
The coupon rate is the
A) annual coupon payment divided by the face value of the bond. B) annual coupon payment divided by the market value of the bond. C) difference between the face value of the bond and its par value. D) coupon paid every 6 months divided by par value.
When firms in a competitive market are experiencing zero economic profits, this is an indication that
A. There is currently no better way to use society's scarce resources. B. Accounting losses are being experienced by these firms. C. They should be producing a different product. D. They will eventually go bankrupt.