Figure 15.3 depicts a one-mile stretch of beach with 100 swimmers distributed evenly along the beach. There are two ice cream vendors - 1 and 2 - on the beach selling an identical product. Assume that each swimmer buys only one ice cream cone and that they prefer to buy ice cream from the nearer vendor. If vendor 1 is at A while vendor 2 is at D, vendor 1 has an incentive to move:
A. to the left of its current location.
B. to the right of vendor 2's location.
C. toward the median location.
D. None of these
Answer: C
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An import quota or tariff on French wine that raises the prices for wine will probably a. hurt domestic wineries, which will lose business as a result of the higher prices
b. hurt both domestic wine drinkers and domestic wine producers because of a reduction in competition. c. hurt both domestic wine drinkers and domestic wineries but this will be more than offset by a reduction in driving fatalities. d. hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.
Higher interest rates
A. Increase the quantity of loanable funds. B. Decrease the quantity of loanable funds. C. Increase the level of risk. D. Decrease the level of risk.
Which of the following policies would most likely increase the money supply?
a. Selling government bonds b. Raising the discount rate c. Lowering tax rates d. Lowering the required reserve ratio e. Decreasing the prime lending rate
Which of the following statements is true about price ceilings?
A. Price ceilings cause goods to be rationed by some other means than free market prices. B. Ration coupons are the only way to ration goods when price ceilings are in place. C. Price ceilings cause goods to be rationed by prices. D. All of these statements are correct.