Suppose that the price of gasoline doubles overnight. Why is the short-run price elasticity of demand for gasoline different from the long run?
It takes time to adjust. In the short run, you may car pool and/or cut down on automobile travel in other
ways. In the long run, you will buy a more fuel-efficient automobile.
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The Japanese system of universal health insurance requires no co-payments from residents for health services
Indicate whether the statement is true or false
Simple measures such as ________________ can help overcome the problem of using up common resources.
a. laws regulating or banning usage b. cap-and-trade emissions regulations c. private property d. explaining the tragedy of the commons
Figure 8.3 shows demands and costs for a monopolistically competitive firm. When the firm's demand curve shifts from D1 to D2 and to D3:
A. the firm's economic profit remains the same. B. the firm's marginal revenue at the profit-maximizing output level is decreasing. C. the firm's marginal cost at the profit-maximizing output level is increasing. D. the firm's average cost at the profit-maximizing output level is decreasing.
Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $625 per robot. To maximize profits, Robbie's Robots should
A. make no adjustments as they are already maximizing their profits. B. increase their output. C. decrease their output. D. stop producing since it is earning a loss.