Why might luxury-goods retailers limit purchases on a good by consumers "due to popular demand"?
A) Because they are worried about running out of supply, leaving some of their customers unhappy that they can't buy the good.
B) Because they are trying to use scarcity as a way to improve the brand image of the good.
C) Because they are limiting the possibility of arbitrage, where consumers buy in a low price area and resell in a higher price area.
D) Because they are worried that they'll run out of the good during the all-important holiday season.
C
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If Congress passed a one-time tax cut in order to stimulate the economy in 2014, and tax rate levels returned to their pre-2014 level in 2015, how should this tax cut affect the economy?
A) The tax cut would increase consumption spending more than would a permanent tax cut. B) The tax cut would lower the price level in 2014. C) The tax cut would increase consumption spending by the same amount as would a permanent tax cut. D) The tax cut would increase consumption spending less than would a permanent tax cut.
Governments can eliminate market failure due to an imperfectly competitive market by
A) changing the market structure, for example by eliminating monopoly protection. B) having the government own the monopoly. C) imposing regulations that reduce prices. D) All of the above.
Which of the following is true about the demand curve facing the dominant firm?
A) It equals market demand minus fringe firms' supply curve. B) It is identical to market demand. C) It equals market demand minus demand facing the fringe firms. D) It is horizontal.
A capital intensive production process is one in which:
A. highly specialized capital is needed to produce the good. B. a part of the production process must be done by capital and cannot be substituted. C. a lot of capital is hired relative to the total inputs needed to produce the good. D. total costs will be minimized if capital is the primary factor of production used.