If salsa and nacho chips are complements, an increase in the price of nacho chips would
a. increase the price of salsa.
b. decrease the demand for salsa.
c. increase the demand for salsa.
d. have no effect on the demand for salsa.
B
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The above figure shows the demand curve for movie rentals from Redbox. If Redbox raised its price from $2.50 to $3.00, between these two prices the price elasticity of demand equals
A) 1.2. B) 0.8. C) 2.0. D) 0.5.
Humana Hospital's price/marginal cost ratio of 2.3 is most likely to decline if
A) the number of nearby hospitals increases. B) the number of nearby hospitals decreases. C) the demand curve for hospital services shifts rightward. D) the demand curve for hospital services becomes steeper.
If MC's Hammers, a perfectly competitive firm, finds that its total revenue is $45,000 . its fixed cost is $20,000 . and its total cost is $50,000 . its producer surplus is
a. zero because TC > TR b. -$5,000 c. $25,000 d. $15,000 e. -$25,000
If a road is congested, then use of that road by an additional person would lead to
a. a negative externality. b. a positive externality. c. a natural monopoly. d. a free-rider problem with rush hour drivers stuck in traffic. e. none of the above.