Regulations that strictly limit pollution
a. provide firms no incentives to reduce pollution once a standard is met.
b. provide incentives for firms to discover loopholes in the regulations.
c. tend to be economically inefficient ways to reduce pollution.
d. All of the above are true.
d
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The above figure shows the market for game day t-shirts. If the price of t-shirts is $12, then
A) the market is in equilibrium. B) there is a surplus and the price of t-shirts will fall. C) there is a shortage and the price of t-shirts will fall. D) there is a shortage and the price of t-shirts will rise. E) there is a surplus and the price of t-shirts will rise.
Limit pricing occurs when a firm sets price:
A. equal to marginal cost. B. equal to average cost. C. at different amounts for different groups of consumers. D. so low that other firms are prevented from entering the market.
Supermodel Linda Evangelista has been quoted as saying, "[I] don't wake up for less than $10,000 a day." If Ms. Evangelista is paid $15,000 for her next daylong photo shoot, then
A. she is receiving economic rent to labor equal to $5,000. B. she is being paid $15,000 to cover her opportunity cost. C. the entire $15,000 would be considered economic rent to labor. D. the first $10,000 she receives is economic rent to labor and the next $5,000 is more economic rent.
Suppose Lisa spends all of her money on books and coffee. When the price of coffee decreases, the
A) substitution effect on coffee is positive, and the income effect on coffee is positive. B) substitution effect on coffee is ambiguous, and the income effect on coffee is ambiguous. C) substitution effect on coffee is positive, and the income effect on coffee is ambiguous. D) substitution effect on coffee is ambiguous, and the income effect on coffee is positive.