The De Beers Company, one of the longest-lived monopolies, is facing increasing competition. One source of competition comes from people who might resell their previously owned diamonds
Why is De Beers worried that people might resell their previously owned diamonds?
A) because the availability of previously owned diamonds would make the market demand curve for diamonds more inelastic and force De Beers to lower its price
B) because previously owned diamonds would be a close substitute to newly mined diamonds and therefore reduce De Beers' market power
C) because the availability of previously owned diamonds would increase the market demand for diamonds and dilute De Beers' monopoly
D) because De Beers will not be able to guarantee the quality of previously owned diamonds and fears that its reputation might be harmed
B
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The balance of payments improves
A) when there is an exchange rate appreciation. B) when there is an exchange rate depreciation. C) when the interest rate rises. D) never.
The fraction of each added dollar of income that is used for consumption is called the:
a. average propensity to consumer (APC). b. autonomous consumption rate (ACR). c. marginal consumption propensity (MCP). d. marginal propensity to consume (MPC).
In 2003, the top 20 percent, or wealthiest fifth, of U.S. households earned _____.
(A) About the same as the bottom four fifths combined. (B) Less than the bottom four fifths combined. (C) More than the bottom four fifths combined. (D) Less than the bottom three fifths combined.
Which of the following is NOT an explicit cost?
A) taxes B) rent C) wages D) opportunity cost of using an owner's savings