You purchase a $30, nonrefundable ticket to a play at a local theater. Ten minutes into the show you realize that it is not a very good show and place only a $10 value on seeing the remainder of the show. Alternatively you could leave the theater and go home and watch TV or read a book. You place an $8 value on watching TV and a $12 value on reading a book
a. You should stay and watch the remainder of the show.
b. You should go home and watch TV.
c. You should go home and read a book.
d. You should go home and either watch TV or read a book.
c
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In India last year, the growth rate of real GDP was 3.5 percent and the population grew from 1,000 million people to 1,100 million. Real GDP per person
A) increased by 13.5 percent. B) decreased by 6.5 percent. C) increased by 6.5 percent. D) decreased by 13.5 percent. E) increased by 3.5 percent.
Martha's Cleaning Services is a perfectly competitive firm that currently cleans 30 offices a week and charges $20 per office, which is the going market price. Martha's marginal cost is $15
What should Martha do to increase her economic profit? Clean more offices? Raise her price? Explain your answer.
A price floor set above an equilibrium price tends to cause persistent imbalances in the market because
a. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. b. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. c. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. d. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.
Economic analysis suggests that patent laws that can often be used to limit the entry of potential competitors into an industry
a. redistribute income from consumers to business decision makers without affecting the allocation of resources. b. may be a source of business monopoly power, but they may also encourage innovation in the long run. c. encourage product development and the adoption of cost-reducing technologies in the short run but in the long run generally lead to business monopoly. d. help inventors at the expense of consumers in the long run.