In the example of good and bad cigarettes, the authors found that bad cigarettes where inferior because
a. they are an economic bad.
b. second hand smoke is an economic bad.
c. they comprised a large portion of the smokers budget.
d. many more useful goods are also inferior.
c. they comprised a large portion of the smokers budget.
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Suppose the firms in a monopolistically competitive market are earning positive economic profits. What will happen to move the market to its long-run equilibrium?
A) The firms' demand curves will become less elastic. B) The demand curves faced by firms in the market will shift to the right. C) More close substitutes will appear in the market. D) Some firms will exit the market if they can't cover all of their fixed and variable costs.
Third-degree price discrimination exists when
A) the seller knows exactly how much each potential customer is willing to pay and will charge accordingly. B) different prices are charged by blocks of services. C) when the seller can separate markets by geography, income, age, etc., and charge different prices to these different groups. D) when the seller will bargain with buyers in each of the markets to obtain the best possible price.
The Goldin and Lewis (1975) study of the costs of the Civil War:
a. finds peaceful abolition of slavery would have been more costly than the War. b. fails to include an estimate for the loss of human capital due to the War. c. estimates the total cost of the War at more than double national income in 1860. d. finds Northern property damage to be a major factor in the War's cost.
A dozen eggs cost $2 in the U.S. and 12 pesos in Argentina. If the real exchange rate is 5/6, what is the nominal exchange rate? Show your work