Why are sellers willing to sell more at a higher price?
Only at higher price will it be profitable for sellers to incur the higher opportunity cost associated with producing and supplying a larger quantity. Principle of increasing cost suggests that if more resources are devoted for the production of one commodity its opportunity cost increases. It would be profitable to produce more of that commodity only if its market price increases.
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The data in the table above give two points on the demand curve for pizza. Using the midpoint method, when the price of a pizza falls from $10 to $9, what is the percentage change in price?
A) 8.2 percent B) 15.5 percent C) 10.5 percent D) 5.0 percent E) 1.0 percent
How does the federal government avoid the asymmetric information problem associated with providing health care to people over 65 years of age?
A) Health care is standardized and is the same for all people over 65 years of age. B) Health insurers rely on the reputation of the covered individuals. C) Participation in the Medicare program is mandatory for all people over 65 years of age. D) Health information about people enrolled in the Medicare program is publically available.
The ways to escape a prisoner's dilemma is to
A) make commitments and play the game repeatedly. B) collude. C) find a dominant strategy. D) give up the game.
Economist Douglass North suggests that the term used to describe government bodies, development agencies, and international groups should be:
A. groups. B. institutions. C. agencies. D. organizations.