One of the best defenses we have against malaria these days comes from a fern-like weed called wormwood. Fluctuating supply and demand have pushed the plant's price from $155 per kilo one year, to over $1000 the next
There is a push to set a price ceiling for the plant. Which of the following would NOT occur if there was a price ceiling set below the equilibrium price on wormwood? A) The wormwood market would be allocatively efficient because its price would not fluctuate.
B) A wormwood shortage might occur.
C) A black market for wormwood may be created.
D) There would be an increase in inefficiency in the wormwood market.
A
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In the United States the stake of top management in firms' ownership usually is
A) less than 5%. B) more than 25%. C) more than 50%. D) more than 75%.
Advertising ________ have the potential to mislead ________ buyers about the characteristics of experience goods.
A) does; first-time B) does not; first-time C) does; repeat D) does not; greenwashed
Suppose the cost of operating a 100 room hotel for a night is $10,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $30 and a customer is willing to pay $60 for the night, the hotel manager should
a. rent the room because the marginal benefit exceeds the marginal cost. b. rent the room because the marginal benefit exceeds the average cost. c. not rent the room because the marginal benefit is less than the marginal cost. d. not rent the room because the marginal benefit is less than the average cost.
In this graph, at which of the market prices would the firm make short-run economic profits?
a. P1
b. P2
c. P3
d. P4