Pepsi and pizza are normal goods. When the price of pizza falls, the substitution effect by itself will cause a
a. shift to a lower indifference curve so that the consumer buys less Pepsi.
b. shift to a higher indifference curve so that the consumer buys more Pepsi.
c. movement along the indifference curve so that the consumer buys more Pepsi.
d. movement along the indifference curve so that the consumer buys less Pepsi.
d
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In the above figure, if the firm is in monopolistic competition, its price will be
A) $1. B) $2. C) $3. D) $4.
The first major piece of antitrust legislation was the
a. Clayton Act. b. Obama Care Act. c. Sherman Act. d. Clinton Act.
Additional firms often do not try to compete with a natural monopoly because
a. they fear retaliation in the form of pricing wars from the natural monopolist. b. they are unsure of the size of the market in general. c. they know they cannot achieve the same low costs that the natural monopolist enjoys. d. the natural monopoly does not make a large profit.
The governor has proposed to clean up all the trash on the side of the highway. The project is estimated to cost the tax payers and additional $15,000. The city will benefit by having a clean highway which will entice tourists to stop along their routes. The project is estimated to bring in $12,000 of revenue from the highway being cleaned. Should the governor continue with the project?
A. No, the project will not bring in enough benefit to cover the costs. B. Yes, the project will have $12,000 of benefits to the city folks. C. Yes, the tax payers wanted the highway cleaned up. D. No, the benefit from the project will only be $3000.