When the price of Nike soccer balls decreased, Ronaldo purchased more Nike soccer balls and fewer Adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike soccer balls?
A. An increase in the demand for Nike soccer balls
B. The price effect
C. The income effect
D. The substitution effect
Answer: D
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Diminishing marginal productivity can occur due to the following reason(s)
a. the difficulty of monitoring and motivating larger workforces b. the increasing complexity of larger systems c. the "fixity" or permanence of some factor of production d. all of the above
Market-based policies are effective methods that the government can use to address externality problems.
Answer the following statement true (T) or false (F)
Which of the following combinations of characteristics best describes a monopolistically competitive firm?
A. Supplies a small share of the market and sells a product that is undifferentiated from other firms in the market. B. Supplies a large share of the market and sells a product that is undifferentiated from other firms in the market. C. Supplies a small share of the market and sells a product that is slightly different than its competitors. D. Supplies a large share of the market and sells a product that is slightly different than its competitors.
The higher prices charged by monopolists:
A. are like a private tax that redistributes income from consumers to monopoly sellers. B. are socially optimal because they better reflect how much society values the good relative to the resources used to produce it. C. return to consumers through the public goods provided by monopolies. D. have no effect on the distribution of income.