As the price of milk increases, what would reasonably be expected to happen to the equilibrium price and equilibrium quantity of cereal? (Milk and cereal are complements.)
A) Equilibrium price would increase and equilibrium quantity would decrease.
B) Equilibrium price and quantity would both decrease.
C) Equilibrium price would decrease and equilibrium quantity would increase.
D) Equilibrium price and quantity would both increase.
B
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When a firm is experiencing diseconomies of scale
A) the MP curve has a negative slope. B) the LRAC curve has a positive slope. C) it must also experience diminishing returns to labor. D) the MC curve has a negative slope.
Direct controls that impose equal percentage reductions in emissions on all firms in the area
A. impose the same costs on all firms. B. minimize the cost of pollution reduction. C. penalize firms that have already incurred some costs to reduce pollution. D. are the fairest way to distribute the burden
Behaving strategically means:
A. evaluating decisions in which players act in their own self-interest, but the interplay of those decisions does not exist. B. acting to achieve a goal by withholding key information from the person with whom an exchange is being made. C. acting to achieve a goal by anticipating the interplay between your own and others' decisions. D. evaluating the impact of your choices on an uninvolved third party.
The opportunity cost of a decision is the value of the best foregone alternative to the decision-maker
a. True b. False Indicate whether the statement is true or false