An increase in price causes exit from a constant-cost industry.
Answer the following statement true (T) or false (F)
False
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When allocating resources using market price
A) everyone who is willing and able to pay for a good gets one. B) everyone who wants a good gets one. C) everyone who is willing to pay for a good gets one. D) everyone who is able to pay for a good gets one.
Even though insignificant explanatory variables can raise the adjusted R2 of a demand function, one should not interpret their effects on the regression when
a. testing marketing hypotheses about the determinants of demand b. analyzing inventory relative to capacity requirements c. forecasting unit sales for operations planning d. sales revenue reaches its peak e. planning for capital budgets
The law of diminishing marginal utility applies to goods with negative income elasticities; it does not always apply for goods with positive income elasticities
a. True b. False
Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?
a. The benefits are usually easier to measure than the costs. b. Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs. c. Estimating the value of a human life is difficult but necessary to evaluate the proposal. d. Both a and b are correct.