A new Mexican restaurant opened in the town of Manchester. The residents of the town are
a. happy because of the product-variety externality, while other restaurant owners are unhappy because of the business-stealing externality.
b. happy because of the business-stealing externality, while other restaurant owners are unhappy because of the product-variety externality.
c. unhappy because of the product-variety externality, while other restaurant owners are happy because of the business-stealing externality.
d. unhappy because of the business-stealing externality, while other restaurant owners are happy because of the product-variety externality.
a
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The labor supply curve faced by an individual firm in a perfectly competitive market is
A) upward sloping. B) horizontal. C) vertical. D) downward sloping.
In the long run, entry ensures that the typical monopolistically competitive firm will
a. produce at minimum efficient scale b. earn an economic profit c. earn a normal profit d. price its output at marginal cost e. standardize its product
Ceteris paribus, which of the following is most likely to cause an increase in the quantity supplied of perfume?
A. An increase in the salaries paid to perfume makers. B. An increase in the price of perfume. C. An improvement in perfume-making technology. D. An increase in the number of sellers of perfume.
The Hazards, a professional baseball team, want to sign pitcher Alex McScoob to a two-year contract but, because of salary cap limitations, can only pay $8 million for the first year (Alex's market value is $10 million per year). The Hazards offer to pay
$8 million in year 1 and $13million in year 2. Should Alex sign the contract? A. Yes, Alex is better off financially regardless of the interest rate. B. Yes, if the interest rate is less than 50 percent. C. Yes, but only if the team expects to be successful. D. Yes, but only if the interest rate is less than 10 percent.