Most markets, if left alone, will tend toward
A. elasticity.
B. market price.
C. zero price.
D. equilibrium price.
Answer: D
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The Snowshoe Inn in Vermont charges $259 per room during the winter ski season and $149 during the summer months. The number of rooms available and the operating costs for the inn remain constant throughout the year. What is indicated by these prices?
A. The demand curve shifts out in the summer. B. The demand curve shifts out during the winter months. C. The supply curve shift in during the summer. D. There is a decrease in demand during the winter.
Discounting is the process whereby
A) present values are adjusted to their future value, using the interest rate. B) future values are converted to their value today, using the interest rate. C) product prices are reduced (discounted) to increase sales and profits today. D) future values are adjusted for inflation.
For a rational consumer, the consumer’s surplus will never be a negative number.
Answer the following statement true (T) or false (F)
Suppose maple syrup is illegal in the country of Pancake. If there are two ways to smuggle maple syrup into Pancake: one through overland and one by sea. If the proud Pancakian coast guard is able to arrest all who attempt to smuggle syrup by sea, what would the theory of rent predict?
A. The production costs of smuggling syrup by sea will fall to zero as the use of the sea route falls to zero. B. The increased rents to maple syrup will reduce demand for maple syrup. C. Rents for using the land route will increase, making syrup smugglers on net better off. D. Rents for using the land route will increase, but syrup smugglers on net will likely not be better off.