The adjustment of the ____________ is the rationing mechanism in market economies.
A. price
B. competition
C. government
D. None of the choices are correct.
A. price
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For a firm in monopolistic competition, selling costs
A) increase costs and reduce profits. B) always increase demand. C) can change the quantity produced and lower the average total cost. D) can lower total cost. E) have no effect on the quantity sold.
While waiting in line to buy one cheeseburger for $1.50 and a medium drink for $1.00, Sally notices that she could get a value meal that contains both the cheeseburger and medium drink and also a medium order of fries for $2.75. She thinks to herself, "Is it worth the extra 25 cents to get the medium fries?" To an economist, Sally's decision is an example of:
A. marginal analysis. B. basing decisions on total, rather than marginal, value. C. an unintended consequence. D. the fallacy of composition.
Refer to the figure below. During high-peak times, what price-quantity combination should the firm charge to maximize profit? 
A. P4 and Q3 B. P2 and Q3 C. P1 and Q2 D. P1 and Q3
If an increase in income results in a decrease in the quantity demanded for a product, the product is ________, and the value of the income elasticity of demand is ________.
A. a normal good; positive B. a normal good, negative C. an inferior good; positive D. an inferior good; negative