A cash gift causes the budget line to:
A. shift to the right in a parallel fashion.
B. rotate clockwise.
C. shift to the left in a parallel fashion.
D. None of the statements is correct.
Answer: A
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Suppose a monopolist offers a $20 mail-in rebate on an item with a list price of $100. In order for the rebate to be a perfect hurdle, it must be the case that:
A. buyers use the rebate if and only if their cost of filling out the rebate is less than $20. B. all buyers with a reservation price greater than $80 use the rebate. C. some buyers with a reservation price greater than $80 use the rebate. D. buyers use the rebate if and only if they have a reservation price between $80 and $100.
If the actual capital stock exceeds the desired capital stock due to a cycle of overbuilding, then
A) net investment will fall dramatically. B) net investment will increase dramatically. C) net investment will not change. D) the effect on net investment is unknown.
It's certain that the equilibrium price will fall when:
A) the supply curve and the demand curve both shift to the right. B) the supply curve shifts to the right and the demand curve shifts to the left. C) supply and demand both increase. D) supply decreases and demand stays the same.
In which of the following cases would entry and exit cease?
A. P > long-run ATC. B. P < long-run ATC. C. P = long-run ATC. D. P > short-run ATC.