The key issue in determining the relevant product market is
A) the degree of interchangeability between products.
B) the specific geographic area in which competing products overlap.
C) the production processes used to produce the goods.
D) the market share test.
Answer: A
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Refer to Table 3-1. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. If the price of Kona coffee falls from $6 to $4, the market quantity demanded would
A) decrease by 89 lbs. B) increase by 110 lbs. C) increase by 61 lbs. D) increase by 26 lbs.
The long-run equilibrium for a firm in an information product industry exists at a point at which
A) marginal cost equals marginal revenue. B) the demand curve crosses the marginal cost curve. C) the demand curve is tangent to the average total cost curve. D) average total cost is minimized.
Most of the money that we pay to foreigners to finance our current accounts deficit
A. flows back to the U.S. in investment funds. B. stays abroad where it circulates as currency. C. ends up in the hands of drug dealers. D. is used by foreign governments as reserves.
Serena Williams should probably not mow her own lawn because
a. her opportunity cost of mowing her lawn is higher than the cost of paying someone to mow it for her. b. she has a comparative advantage in mowing her lawn relative to a landscaping service. c. she has an absolute advantage in mowing her lawn relative to a landscaping service. d. she might sprain her ankle.