A consumer goes to purchase a TV advertised for $300. As he is checking out, the clerk informs him of a $20 rebate offer for the TV, which he fills out and receives in 3 months. What can one can infer about the consumer's reservation price?
A. It was exactly $300.
B. It was at least $300.
C. It was at most $280.
D. It was at least $280 but less than $300.
Answer: B
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Suppose the firms in a monopolistically competitive market are incurring economic losses. What will happen to move the market to its long-run equilibrium?
A) More close substitutes will appear in the market until economic profits are zero. B) The firms that dropped out of the market will reenter once the level of economic losses is zero. C) Firms will continue to exit the market until economic losses are equal to zero. D) The demand functions of all the firms remaining in the market will become relatively more elastic.
A venture capital fund wants to invest $1000 in each of one thousand mad scientists
The first scientist applying to the fund is working on the legendary pill that turns water into gasoline, and the second scientist is working on the even more legendary perpetual motion machine. The smart venture capitalist here will A) back the pill and look for 999 other scientists working on the same pill. B) back the machine and look for 999 other scientists working on the same machine. C) look for 500 scientists working on the pill and 500 working on the machine. D) back the pill, the machine, and 998 other different projects.
Commitment devices are:
A. methods to increase the price of your vices. B. methods to lower the price of your virtues. C. successful whether weak or strong, depending on the situation. D. All of these statements are true.
To an economist, the cost of a college education
A. includes the income that the student could have earned during the time spent in college. B. can be measured solely by the dollar cost of tuition, books, and other fees. C. includes only the cost of schooling, not the cost of housing and food. D. excludes financial aid in computation of the cost of schooling. E. All of these responses are correct.