Because individuals weigh costs and benefits, their economic decisions are _______________.
a. random
b. insatiable
c. rational
d. greedy
c. rational
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Assume a perfectly competitive constant-cost industry is initially at long-run equilibrium. Now suppose that a decrease in market demand occurs. After all the long-run adjustments have been completed, the new equilibrium price
A. will be the same as the initial price, and the output will be less. B. will be less than the initial price, but the new output will be greater. C. will be greater than the initial price, but the new output will be less. D. and industry output will be less than the initial price and output.
Suppose automobile salesmen are required to pay a $1000 tax per car sold
Is it likely that the auto salesmen will bear the entire burden of this tax? Why or why not? Would it matter if the demanders were legally required to pay the tax? Explain in detail your answer.
When Pepsi is considering a price hike, it needs to consider how Coke may react. This situation is called:
A. mutual interdependence. B. price leadership. C. collusion. D. monopolistic competition.
With a natural monopoly, the potentially insurmountable barrier to entry is the
A. low profit margins. B. decreasing average total costs. C. increasing average costs. D. the absence of fixed costs.