Firms in a monopolistically competitive market will advertise because
A. of the significant differences in their product over their competitors.
B. the elasticity for their product is inelastic.
C. they want to differentiate their products.
D. they want to increase the elasticity of the demand curve.
Answer: C
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Suppose you plan to go to school this summer. The cost of tuition and textbooks is $1,400 and housing, board, and entertainment will cost you $500
If you didn't go to school, you'd live in your parents' house for free, but your other living expenses would be about the same. Also, if you didn't go to school you'd work full time and could earn $8,000. You can still work part time while attending the summer school, but you will earn only $3,000. a) What will the summer school cost you in terms of money explicitly paid? b) What are the opportunity costs of going to summer school that you don't pay explicitly? Explain. c) What is your total opportunity costs of going to school this summer? Explain your answer.
Your textbook highlights a debate that has been going on for some years. The issue is whether there should be a corporation tax, given that corporations are nothing more than groups of people. Should there be a corporation tax? Why or why not?
What will be an ideal response?
People consistently consider sunk costs when weighing the trade-offs involved in a decision because:
A. they are rational. B. they are utility-maximizers. C. they think at the margin. D. they find it hard to accept their losses.
Whenever the Democrats gain control of the Congress, spending on social programs increases; whenever Republicans gain control of the Congress, spending on defense increases. Hence, we know what the next party in control will do. This statement is an example of the
A. ceteris paribus fallacy. B. post hoc, ergo propter hoc fallacy. C. fallacy of stability. D. fallacy of inductive reasoning.