Ceteris paribus, as the number of substitutes for a good increases, the
A. Price elasticity of demand should become larger.
B. Cross-price elasticity of demand should become negative.
C. Income elasticity of demand should become negative.
D. Price elasticity of demand should become smaller.
Answer: A
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Most business people calculate marginal cost and marginal revenue to decide how much to produce.
Answer the following statement true (T) or false (F)
A social cost that is not fully paid by the individual using an automobile is
A) traffic congestion. B) gasoline and oil. C) insurance. D) depreciation of the vehicle.
Which conditions must hold if a firm is to successfully engage in price discrimination?
A. It must be extremely difficult, if not impossible, for one consumer to resell a product to another. B. Firms must have a sufficiently low amount of market power. C. Consumers must have very similar preferences for the product. D. All of these are correct
At the point at which planned real consumption spending is equal to real disposable income
A. the consumption function intersects the 45-degree line. B. the consumption function intersects the savings function. C. the consumption function is below the 45-degree line. D. the consumption function is above the 45-degree line.