Suppose angioplasty and coronary artery bypass graft (CABG) surgery are substitute treatment alternatives for coronary artery disease. What should happen to the equilibrium price and quantity of angioplasty procedures if a new CABG technique is introduced that is less invasive (requiring a 4 inch incision under the breast bone rather than cracking open the patient's rib cage) and requires
one-third the recovery period of regular CABG surgery.
a. Both price and quantity will increase.
b. Both price and quantity will decrease.
c. Price will increase and quantity will decrease.
d. Price will decrease and quantity will increase.
e. The introduction of a new CABG procedure should have no effect on the price or quantity of angioplasty procedures.
B
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In a market characterized by many sellers, if an outsider devises a way to reduce transaction costs it will:
a. benefit both buyers and sellers. b. cause both buyers and sellers to lose. c. benefit the buyers but cause the sellers to lose. d. benefit the sellers but cause the buyers to lose.
If the demand for U. S. dollars goes down, the exchange rate will
A) increase and, as a result, net exports in the United States will decrease. B) decrease and, as a result, net exports in the United States will increase C) increase and, as a result, net exports in the United States will increase D) decrease and, as a result, net exports in the United States will decrease
Average revenue is:
A. marginal revenue minus marginal cost. B. total revenue divided by the quantity of output. C. total revenue minus total cost. D. marginal revenue divided by the quantity of output.
Refer to the above graphs. Which shows a perfectly elastic demand curve?
A. Graph A B. Graph B C. Graph C D. Graph D