Costs increase with output in an increasing-cost industry because:
A. input prices increase as the industry competes for scarce resources.
B. firms may be forced to use less productive inputs.
C. the firms become monopolies.
D. Both input prices increase as the industry competes for scarce resources and firms may be forced to use less productive inputs are correct.
Answer: D
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Neoclassical growth theory predicts that China's economic growth rate will ________
A) decrease when the interest rate increases B) continue at around 10 percent a year C) always remain above the U.S. economic growth rate D) eventually converge to the U.S. economic growth rate
A period of expansion in the business cycle ends when
A) the business cycle reaches its peak. B) the business cycle reaches its trough. C) real GDP is less than potential GDP. D) real GDP is equal to potential GDP.
A national chain of bookstores has initiated a frequent buyer program. If you buy a frequent buyer card for $10, you are entitled to a 10 percent discount on all purchases for 1 year. This practice is an example of:
A) peak-load pricing. B) intertemporal price discrimination. C) two-part tariff. D) bundling. E) Both A and B are correct.
Exhibit 3-6 Milk market Price per Quart Quantity Demanded (Quarts per week) Quantity Supplied (Quarts per week) 0.70 20 180 0.60 60 140 0.50 100 100 0.40 140 60 0.30 180 20 In Exhibit 3-6, which of the following are the equilibrium price and equilibrium quantity in the milk market?
A. $0.70 per quart and 200 quarts of milk. B. $0.30 per quart and 100 quarts of milk. C. $0.50 per quart and 100 quarts of milk. D. $0.40 per quart and 60 quarts of milk.