Figure 15.2 depicts a one-mile stretch of beach with 100 swimmers distributed evenly along the beach. There are two ice cream vendors - 1 and 2 - on the beach selling an identical product. Assume that each swimmer buys only one ice cream cone and that they prefer to buy ice cream from the nearest vendor. If vendor 1 is at A, and vendor 2 is at E, vendor 2 will gain the most customers by moving to:
A. a spot between A and B.
B. B.
C. C.
D. D.
Answer: A
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The permanent-income hypothesis can reconcile the cross-section and time-series consumption studies by incorporating the reasonable assumption that at any one time many people are rich because they are enjoying unusually high ________ income, causing
them to have an unusually ________ saving ratio. A) permanent, high B) permanent, low C) transitory, high D) transitory, low
New smartphone applications are developed to help consumers find the cheapest prices in the neighborhood. As a result,
A) firms get greater market power. B) consumers' search costs are greatly lowered. C) firms are able to charge higher prices. D) only smart markets become more competitive.
In an auction where the bidders values are $740, $700, $660, $650, $400, $325 and $300, the highest three bidders decide to form a bid-rigging cartel. What would the winning bid be in this auction?
a. $741 b. $701 c. $651 d. $631
In a market economy, most of what we consume is obtained by
a. a command system b. greed c. altruism d. exchange e. central planning