Which of the following is the best example of an inferior good?
A) Premium beer B) Kool-Aid
C) Vintage California wine D) Vintage French champagne
Answer: B
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Figure 8-3
Figure 8-3 shows a firm’s total profit function. At an output of 40, the firm’s total profit equals ____.
A. 10 B. 40 C. 200 D. 400
If the price of inputs rises and foreign income rises:
a. Aggregate demand and aggregate supply rise. b. Aggregate demand and aggregate supply fall. c. Neither aggregate demand nor aggregate supply change. d. Aggregate demand rises, and aggregate supply falls. e. None of the above.
Which of the following statements best describes the price, output, and profit conditions of monopolistic competition?
A. Price will equal marginal cost at the profit-maximizing level of output; profits will be positive in the long-run. B. Price will always equal average variable cost in the short run and either profits or losses may result in the long run. C. Marginal revenue will equal marginal cost at the short run, profit-maximizing level of output; in the long run, economic profit will be zero. D. Marginal revenue will equal average total cost in the short run; long-run economic profits will be zero.
Jaime's father gives her a car for her graduation from college, but Jaime wants a smartphone. This implies that
A) Jaime's father is not acting out of self-interest because he knows that she really wants a smartphone. B) Jaime's father is acting out of self-interest because he wants to give her something more expensive. C) Jaime is not acting out of her self-interest by wanting something different from what her father gives her. D) Jaime is not rational by asking for a smartphone instead of a car.