"Gasoline purchases were up 10% last week, even though gasoline prices were 6 cents higher than the week before! You see, the law of demand does not hold for gasoline!" What is being misunderstood in the above statement?
A) Nothing at all.
B) It implies the demand curve for gasoline is vertical.
C) It fails to recognize that the demand curve has shifted to the right.
D) It fails to hold constant all the other factors that influence demand.
C
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Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $24
How many hours should Joe stay open? A) 3 hours B) 4 hours C) 5 hours D) 6 hours
Private goods are those for which consumption is
A) rival and excludable. B) rival and nonexcludable. C) nonrival and excludable. D) nonrival and nonexcludable.
We can draw demand curves for firms in perfectly competitive and monopolistically competitive industries, but not for oligopoly firms. The reason for this is
A) perfectly competitive and monopolistically competitive firms sell standardized products. Oligopoly firms sell differentiated products. B) there are no barriers to entry in perfectly competitive and monopolistically competitive industries. There are high barriers to entry in oligopoly industries. C) we can assume that the prices charged by perfectly competitive and monopolistically competitive firms have no impact on rival firms. For oligopoly this assumption is unrealistic. D) that perfectly competitive and monopolistically competitive firms are price takers. Oligopoly firms are price makers.
Refer to Figure 10-6. A change in the price of popcorn only is shown in
A) Panel A. B) Panel B. C) Panel C. D) none of the above panels.