Why do the sellers of some whiskeys pay for advertisements to tell people their whiskey is extremely expensive?
A) Because the sellers either do not know or do not accept the law of demand
B) To allocate the product to people who will most appreciate it
C) To increase the demand
D) To lower the demand and keep production costs low
E) To prevent "price shock" among potential customers
C
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If the quantity of a good exchanged decreased, a. It would also increase the price if it was caused by a shift in demand. b. It would also increase the price if it was caused by a shift in supply
c. It would always decrease the price as well. d. None of the above would be true.
When one firm assumes others in the market will follow its price setting behavior, this is referred to as
a. the kinked demand model b. the godfather model c. oligopoly d. the cartel model e. monopolistic competition
When policymakers impose price controls, they
a. are usually following the advice of mainstream economists. b. usually improve the efficiency of economic activity. c. distort the signals that normally guide the allocation of resources. d. demonstrate a willingness to sacrifice equity in order to improve efficiency.
Under the current structure of Medicare, the movement of the baby boom generation into the retirement phase of life will
a. increase the demand for medical services and the share of those services financed by third parties. b. push both healthcare prices and expenditures upward. c. cause Medicare expenditures to increase and necessitate the need for higher taxes to finance the program. d. do all of the above.