Soda and peanuts are complements. Other influences on buying plans remaining the same, a rise in the price of soda
A) increases the demand for peanuts.
B) decreases the demand for peanuts.
C) decreases the demand for soda.
D) increases the demand for soda.
E) has no effect on the demand for peanuts, though it does change the quantity demanded of peanuts.
B
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In a duopoly with homogeneous products, the best response of a firm is to charge a lower price than its rival as long as ________
A) the rival's price is above marginal cost B) the rival's price is below marginal cost C) the rival's price is above average cost D) the rival's price is below average cost
In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device, all else equal, an increase in the wage differential between high- and low-skill workers leads to
A) an increase in the required minimum share of high-skill workers. B) a decrease in the required minimum share of high-skill workers. C) no change in the required minimum share of high-skill workers. D) None of the above answers are correct.
The price paid by buyers in a market will decrease if the government
a. increases a binding price floor in that market. b. increases a binding price ceiling in that market. c. decreases a tax on the good sold in that market. d. All of the above are correct.
Marginal factor cost is
A. the change in total costs due to a one-unit increase in the variable input. B. the marginal cost of changing the rate of production in the long run. C. the change in the price of an input when an additional unit of the input is hired. D. the change in total costs due to a one-unit change in the quantity of the good produced.