The last time you went on a road trip, you noticed that there were several fast food outlets clustered near some freeway exits, but none at the others. Now that you are familiar with Hotelling's model, you know that the reason for this is:
A. firms vying for a favorable location.
B. the existence of fast food cartels.
C. zoning laws.
D. failure by the firms to correctly distribute themselves.
Answer: A. firms vying for a favorable location.
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If the U.S. dollar appreciates, it means that
a. the domestic price level has declined. b. the domestic purchasing power of the dollar has decreased. c. fewer U.S. dollars are required to purchase foreign currencies. d. more U.S. dollars are required to purchase foreign currencies.
Congress decided to build a new highway as part of a stimulus package. It took a few years to study the environmental impact, draw blueprints, and bid out work before the road construction even got started. This is an example of ______.
a. an impact lag b. a crowding-out lag c. a recognition lag d. an implementation lag
A uniform-abatement policy is:
A. inefficient because it does not exploit the differences in abatement costs among firms. B. efficient because an equal amount of pollution is assigned to each firm. C. inefficient because it incurs relatively low compliance costs. D. efficient because it helps firms lower their production costs.
Refer to the above table. At a price of $450, there is an
A. excess quantity demanded of 9,000 tablets. B. excess quantity demanded of 6,000 tablets. C. equilibrium. D. excess quantity supplied of 4,000 tablets.