Assume that you had a ticket for a basketball playoff game that you bought for $50, the maximum price you were willing to pay
If a friend of yours offers to buy the ticket for $100 but you decide not to sell it, how can your decision be explained?
A) by the endowment effect
B) You expect to receive greater utility from attending the playoff game than you received from buying the ticket.
C) by the law of diminishing marginal utility
D) The income effect from the increase in the price of the ticket from $50 to $100 was greater than the substitution effect.
A
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If you returned a $5 Federal Reserve note to the Fed, you could receive: a. $5 in silver
b. $5 in gold. c. 5 one-dollar bills. d. 10 one-dollar bills. e. a small gold bar.
A rent control law, where tenants pay below-market rents, is a market restriction that may induce a decrease in the supply of rented apartments
a. True b. False Indicate whether the statement is true or false
The vertical portion of the AS curve
A. is a short-run phenomenon. B. shows national output rising with the price level. C. does not shift over time, due to economic growth. D. represents the maximum output level.
A monopolist earns $50 million annually and will maintain that level of profit indefinitely, provided no other firm enters the market. If another firm successfully enters the market, the incumbent's profits remain at $50 million the first period, but fall to $25 million annually thereafter. The opportunity cost of funds is 10 percent, and profits in each period are realized at the beginning of each period. If the monopolist can earn $27 million indefinitely by limit pricing, should it do so?
A. No, it will earn $297 million in present value if it does this. B. Yes, it will earn $297 million in present value if it does this. C. No, it will earn $270 million in present value if it does this. D. Yes, it will earn $270 million in present value if it does this.