An antitrust agency is identifying the product market for Good X and determines that Good X and Good Y have a cross-price elasticity of 15.2. As a result of the cross-price elasticity, the antitrust agency is likely to ________ Good Y from Good X's product market as the products ________ compete as close substitutes.
A) exclude; do not
B) exclude; do
C) include; do not
D) include; do
D) include; do
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Refer to the scenario above. The average payoff of the bet is:
A) $50. B) $100. C) -$50. D) -$100.
An increase in long-run average costs resulting from increases in output is
A. attributed to the law of diminishing marginal product. B. attributed to economies of scale. C. attributed to constant returns to scale. D. attributed to diseconomies to scale.
Related to the Economics in Practice on page 197. Which of the following represents a situation in which a school is experiencing diseconomies of scale?
A. Student enrollment decreases by 30 percent and average total cost increases by 50 percent. B. Student enrollment decreases by 25 percent and average total cost increases by 10 percent. C. Student enrollment decreases by 50 percent and average total cost decreases by 20 percent. D. Student enrollment decreases by 30 percent and average total cost does not change.
An argument against price floors is:
A. producers will reduce the quality of the goods they sell. B. the cost to taxpayers if the government buys all surplus. C. they transfer surplus from producers to consumers. D. non-price rationing must occur, and can lead to consumers waiting in line.