When a monopolistically competitive firm lowers its price, one good thing happens to the firm. What is this "one good thing" called?
A) the income effect B) the price effect
C) the substitution effect D) the output effect
D
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The price elasticity of demand is measured as
A) the ratio of the typical consumer's quantity demanded to the entire quantity demanded in the market. B) the percentage change in quantity demanded divided by the percentage change in price. C) the number of purchases divided by the price of the product. D) price divided by quantity. E) quantity divided by price.
If an individual has a 0.3 probability of receiving $10 and a 0.7 probability of receiving $20, the expected income is
A) $20. B) $7. C) $14. D) $17.
In the long run, the expansion path is
A) horizontal. B) vertical. C) diagonal. D) Not enough information.
The purpose of an effluent fee is to
A) reduce the amount produced of a good and to raise the market price. B) correct for pollution while keeping the price of the good the same as before the correction. C) reward people producing externalities. D) encourage producers to keep the quantity produced the same while lowering the price.