Sally is shopping for textbooks at the beginning of the semester. What is one reason she might decide to not purchase a textbook?
A) Her expected producer surplus is positive.
B) Her expected consumer surplus is negative.
C) Her expected consumer surplus is positive.
D) Her expected profits are positive.
B
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Strategic reasoning applies to situations in which decisions are interdependent.
Answer the following statement true (T) or false (F)
Suppose you are an analyst for the Coca-Cola Company. An individual's inverse demand for Coca-Cola is estimated to be P = 98 ? 4Q (in cents). If Coca-Cola is produced according to the cost function C(Q) = 1,000 + 2Q (in cents), compute the surplus consumers receive when Coca-Cola charges the optimal block price.
A. $0 B. $11.52 C. $576 D. $1,152
Assume the graph shown represents Dawn's budget constraint. If Dawn's income to spend on these two items increased and Dawn spends all her income on these two goods, then Dawn's total utility from consuming these two goods:
A. will likely go up, since she can afford more of both goods now.
B. will likely go down, since her marginal utility of additional items decreases the more she consumes.
C. will likely go down, since she is probably sick of these two things already.
D. will likely go up, since her marginal utility of additional items increases the more she consumes.
In situations where businesses who choose to discriminate because they are prejudiced are few in an industry, discrimination:
A. will be eliminated by the competitive market. B. will persist because customers will not give them patronage. C. will persist in an efficient market. D. None of these is true.