Refer to the above figure. A price support set at P3 will
A) lead to a surplus of Q3 minus Q1.
B) lead to a shortage of Q3 minus Q1.
C) lead to an equilibrium quantity of Q2.
D) be ineffective.
A
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Marginal costs are the costs relevant to a decision because they
A) are the costs that will be affected by the decision. B) the cost of producing one more unit of output. C) total cost divided by units of output. D) total cost minus sunk costs.
Nike has used Michael Jordan to create the impression that Air Jordan basketball shoes are superior to any other basketball shoes. Nike is attempting to
A) differentiate Air Jordan basketball shoes from other types of basketball shoes. B) convince consumers that Air Jordan basketball shoes are no different from other basketball shoes favored by celebrities. C) lower the marginal cost of producing Air Jordan basketball shoes. D) increase its profit by raising the price of Air Jordan basketball shoes.
If a country's budget deficit decreases, then the exchange rate
a. rises, which raises net exports. b. rises, which reduces net exports. c. falls, which raises net exports. d. falls, which reduces net exports.
Economists agree that a monopolistically competitive market structure
A) lowers consumer utility because consumers pay a price higher than the marginal cost of production. B) is detrimental to society because it leads to a waste of scarce resources. C) benefits consumers because firms produce products that appeal to a wide range of consumer tastes. D) can eliminate any excess capacity if all firms in the industry devote more funds to differentiating their products.