The above figure shows the market for bicycles. When there is a physical fitness craze so that everyone wants to exercise the
A) demand curve for bicycles shifts from D1 to D2.
B) demand curve for bicycles shifts from D2 to D1.
C) demand curve and the supply curve of bicycles do not shift.
D) supply curve of bicycles shifts from S1 to S2.
A
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What are the three limitations on human rationality that behavioral economics emphasizes?
What will be an ideal response?
A basic tenet of the theory of the firm is that the firm's primary objective is to
A) stay out of debt. B) produce a given level of output at a specified cost. C) maximize economic profits. D) operate for the benefit of society.
Perfectly competitive markets are:
A. the most common type of market in our economy. B. hard to find in a real world setting. C. made up principally by consumer goods. D. typically found in industrial sectors of our economy.
Which one of the following factors reduces the likelihood that a cartel agreement will lead to higher producer profit?
a. significant barriers to entry into the cartelized market b. the development of substitutes for the good produced by the cartel c. government restrictions that limit competition from new rivals d. a small number of sellers involved in the cartel agreement