In surveying their alumni, State U's economics department discovered that ramen noodle consumption declined once students graduated and found jobs. One conclusion the survey team might draw from this result is that:
A. ramen noodles are an inferior good.
B. college graduates have a high reservation price for ramen noodles.
C. there is excess demand for ramen noodles.
D. the equilibrium price for ramen noodles is too high.
Answer: A
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Which of the following is a defining feature of a multinational firm?
a. It exports goods and services to foreign nations. b. It develops joint ventures with foreign firms. c. It owns and operates production facilities in more than one country. d. It employs agents in various countries to sell their products abroad. e. It holds patents on its products and services.
The Exchange Rate Mechanism (ERM) was:
A) an attempt to bring all countries under a fixed exchange rate system. B) a fixed exchange rate system in Europe, with the Deutsche Mark as the anchor currency. C) a fixed exchange rate system in Europe, with the British pound as the anchor currency D) a fixed exchange rate system in use in the 1960s.
CARFAX is a company that compiles and sells histories of used cars. CARFAX reduces the:
A. number of cars exchanged in the used car market. B. information asymmetry in the used car market. C. number of used cars offered for sale in the market. D. cost of used cars in the market.
When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the
A) substitution effect. B) income effect. C) price effect. D) output effect.