Someone who derives benefits from something not paid for is a ______.
a. negative spillover
b. rival consumer
c. free rider
d. moral hazard
c. free rider
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Recall the Application about the response of bike messengers in Zurich to a change in wages to answer the following question(s).Recall the Application. A study of the messengers in Zurich showed that as the messengers' revenue share increased from 40% to 50%, the bike messengers took more shifts but pedaled slower. If the increase in the revenue is similar to a wage increase, then the increase in the shifts taken is reflective of:
A. the income effect. B. the substitution effect. C. neither the income nor the substitution effect. D. both the income and the substitution effect.
A monopolistic competitor would face a demand curve with a
A. slope equal to 0. B. positive slope. C. negative slope. D. constant slope.
If a profit-maximizing firm is currently producing output where MR = MC in the short run, it should
A. not change output. B. shut down. C. decrease output. D. increase output.
Compared to a perfectly competitive firm, the demand schedule of a monopolistically competitive firm faces is
A. perfectly price inelastic. B. less price elastic. C. perfectly price elastic. D. more price elastic.