Compared to monopoly, the market results with monopolistic competition are usually expected to be:
A. worse because consumers get fewer choices.
B. worse because consumers pay a higher price.
C. better because consumers pay a lower price.
D. better because consumers get less output.
Answer: C
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Refer to Table 8-5. The value added by the automobile dealer equals
A) $7,000. B) $15,000. C) $18,000. D) $25,000.
The annual rate of growth of commodity output during the Civil War:
a. held constant from the previous decade. b. increased by roughly 25 percent. c. fell by more than 50 percent. d. None of the above is correct.
Suppose you have purchased a non-refundable plane ticket and, at the last moment, you cannot take the trip. You can, however, sell the ticket. If you paid $700 for the ticket, the cost of sending the ticket to someone through overnight mail is $20, and you spend $10 on a courier to get the ticket to the post office for overnight delivery, what is the minimum you should accept for the ticket?
a. $700 because that is what the ticket cost. b. $720 because that is the cost of the ticket and of getting it to the buyer. c. $730 because that is the total cost of the ticket and getting it to the buyer. d. More than $730, so that you can make a profit. e. $30 because the $700 is a sunk cost.
What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?
a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Quantity will rise, and the effect on price is ambiguous.