Suppose in the city of Smugsburg, Blu-ray disc rental stores operate in a monopolistically competitive market. If the price of Blu-ray disc rentals in Smugsburg is currently equal to $5 per tape and the average cost of renting videos is $1 per Blu-ray disc, in the long run we expect the price of renting Blu-ray discs to:
A. increase.
B. stay the same.
C. decrease, and the average cost of producing Blu-ray disc rentals to increase.
D. decrease, and the average cost of producing Blu-ray disc rentals to decrease.
Answer: C
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If people act as if they systematically pursue their own self-interest, then they will most likely
A) respond irrationally to any incentive. B) respond to a given incentive in a random manner. C) respond predictably to a given incentive. D) not respond to any incentive.
Although asset price bubbles seem obvious after the fact, it is much more difficult to draw such a conclusion before the fact
a. True b. False Indicate whether the statement is true or false
Productivity levels are higher in rich countries compared to poor countries.
Answer the following statement true (T) or false (F)
Refer to Scenario 9.6 below to answer the question(s) that follow. SCENARIO 9.6: Celeste borrowed $40,000 from her brother to open a car wash. She pays her brother a 5% yearly return on the money he lent her. Her other yearly fixed costs equal $18,000. Her variable costs equal $40,000. In her first year, Amy sold 40,000 car washes at a price of $2.50 per car wash.Refer to Scenario 9.6. Celeste's total costs equal
A. $20,000. B. $40,000. C. $60,000. D. $100,000.