Many manufacturers sell products labeled as having imperfections at a discount at their factory outlets but do not ship these imperfect goods to regular retail outlets. Why?
What will be an ideal response?
There is some substitutability between the goods, but imperfects sell for a lower price. Suppose, for example, the good sells for $2, but imperfects sell for $1. Both goods cost the same to ship, say $1. As a result, the relative price of an imperfect at a factory outlet is (1/2 ) but rises to (2/3 ) at the retail outlet, where imperfects will not sell because of the higher relative price.
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According to the economic way of thinking,
A) the private sector is more important than the public sector. B) the public sector is more important than the private sector. C) the public sector cannot be adequately studied using economic theory. D) people in society strive to advance the projects they are interested in, and they will advance their interests through market institutions or the institutions of government.
The Social Security program is like a private pension plan in that _____
a. it is a pay-as-you-go system b. it is voluntary c. benefits are a function of earlier contributions d. you have a legal right to your benefits
Instead of conducting laboratory experiments to generate data to test their theories, economists often
a. ask winners of the Nobel Prize in Economics to evaluate their theories. b. argue that data is impossible to collect in economics. c. gather data from historical episodes of economic change. d. assume that data would support their theories.
Earth Movers & Shakers operates 3 iron ore mines. The accompanying table shows each mine's total daily production and the current number of miners at each mine. All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. Total Tons Per DayNumber of MinersMother Lode10025Scraping Bottom3010Middle Drift7515 The opportunity cost of moving one miner from Mother Lode to another mine is:
A. 3 tons per day. B. 4 tons per day. C. 1 ton per day. D. 2 tons per day.