Good X is a normal good. If the average income of those who buy good X rises, the _____________ curve for good X will shift ____________ resulting in a(n) _____________ in the equilibrium price of X and a(n) ____________ in the equilibrium quantity of X
A) supply; rightward; decrease; increase.
B) demand; leftward; decrease; decrease
C) demand; rightward; increase; increase
D) supply; leftward; increase; decrease
E) supply; leftward; increase; increase
C
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If wages a firm pays it workers increase, then
A) the firm's long-run average cost curve shifts upward. B) the firm moves rightward along its long-run average cost curve to where it has diseconomies of scale. C) the firm's long-run average cost curve does not shift and there is no movement along the long-run average cost curve. D) the firm moves rightward along its long-run average cost curve but not necessarily to where it has diseconomies of scale.
Why do patents stimulate research?
A) Patents give firms time to do research. B) Patents give firms the opportunity to recover research costs and thus a profit motive. C) Firms would research as much even without patents. D) Patents don't stimulate research.
If something happens to alter the quantity demanded at any given price, then
a. the demand curve becomes steeper. b. the demand curve becomes flatter. c. the demand curve shifts. d. we move along the demand curve.
Marissa owns a small cottage by the lake. Big Boy’s Sawmill is next door, and it dumps sawdust into a sinkhole it owns. Unfortunately for Marissa, the sinkhole opens into a brook on her land, which gets clogged by the sawdust. It costs Marissa $3,000 per year to clean up the sawdust. Big Boy’s can dispose of the sawdust by having it hauled away for $2,000 per year. Marissa offers to pay Big Boy’s $2,500 per year to have the sawdust hauled away. In this example of the Coase theorem, what is the result if Big Boy’s accepts Marissa’s offer?
a. Both parties benefit. b. Big Boy’s suffers while Marissa benefits. c. Both parties suffer. d. Marissa suffers while Big Boy’s benefits.