Assume that the graphs show a competitive market for the product stated in the question.
Select the graph above that best shows the change in the market for leather coats when leather coats become more fashionable among young consumers.
A. graph (1)
B. graph (2)
C. graph (3)
D. graph (4)
Answer: A
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In the short run, a profit-maximizing firm's decision to produce should be guided by whether
A) it makes a profit. B) its marginal profit is maximized. C) its total revenue exceeds its fixed cost. D) its total revenue covers its variable cost.
If we observe that William's budget constraint has moved inward, then we know for certain that
a. his income must have decreased. b. he will be indifferent between goods X and Y. c. the price of one or both of the goods must have increased. d. his utility will decrease.
Which of the following institutions would most likely impose price controls?
a. an environmental protection agency b. a county government c. an international corporation d. a fast-food chain
A problem with a precommitment policy is that it:
A. locks the Fed into contractionary policy. B. determines the Fed's response for a period of time. C. binds the hands of the Fed from responding to unexpected events. D. will cause the Fed to lose credibility.