The above figure shows the payoff to two gasoline stations, A and B, deciding to operate in an isolated town. Suppose a $60 fee is required to enter the market. If firm A chooses its strategy first, then
A) firm A will not enter.
B) neither firm will enter.
C) both firms will enter.
D) firm A will enter and firm B will not.
D
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One effect of market intervention is resource misallocation.
Answer the following statement true (T) or false (F)
As a consumer consumes more and more of a product in a particular time period, eventually marginal utility
A) fluctuates. B) rises. C) is constant. D) declines.
Why do individuals hold money when it does not provide the services that, say, a house does?
A) Money is the most liquid asset. B) Money is the only form in which wealth may be held. C) Money increases in value faster than other assets. D) Money is useful in avoiding taxes on certain transactions.
A change in taxes of a given amount shifts the consumption function vertically by ____ than that amount, because the marginal propensity to consume is ____
a. less; less than 1 b. greater; greater than 1 c. greater; always equal to 1. d. less; equal to zero.