Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect
a. the demand for honey to increase
b. the demand for honey to decrease
c. the quantity demanded of honey to decrease
d. the price of honey to decrease
e. the quantity demanded of honey to increase
Answer: a. the demand for honey to increase
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A perfectly competitive firm should shut down in the short-run if price falls below the minimum of
A) marginal cost. B) marginal revenue. C) average total cost. D) fixed costs. E) average variable costs.
Ginger and Maryann are lost in the jungle, where the only things to eat are mangoes and fish. Ginger can gather more mangoes per hour than Maryann and can also catch more fish per hour than can Maryann. Therefore:
A. Maryann should specialize in the activity for which she has a comparative advantage. B. Ginger should specialize in the activity for which she has an absolute advantage. C. there are no gains to specialization and trade for Maryann. D. there are no gains to specialization and trade for Ginger.
Which of the following is a common result of rent controls?
a. Tenants often move from one rent-controlled apartment to another. b. The upgrades for rent-control apartments increase. c. New housing incentives are reduced. d. Landlords increase their profits.