If a boxing fight is shown on pay-per-view television every Saturday at 4pm, the demand curve for each fight is given below.
If there is a pay-per-view charge to watch a fight, the outcome is ________ because ________.
A. inefficient; the marginal cost of an additional viewing household is zero
B. efficient; prices will allocate the program to those who value it the most
C. inefficient; television stations would not always make a profit
D. efficient; the marginal cost of an additional viewing household is zero
Answer: A
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In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
The presence of a term spread that is usually positive indicates that:
A. bonds of similar risk but with different maturities are not perfect substitutes. B. we should expect the yield curve to usually slope downward. C. we should expect the yield curve to usually be flat. D. the yield curve always slopes upward.
The market demand for school supplies is more elastic at the beginning of the semester than it is at the start of summer vacation.
Answer the following statement true (T) or false (F)
For there to be demand for a good, people must
A. want the good more than they want other goods. B. know the prices of all other goods. C. feel there are few substitutes for the good. D. be willing and able to buy the good at the market price