Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, a new general equilibrium will eventually be reached in sector X with a price of ________ and a quantity of ________.
A. P1; Q0
B. P1; Q1
C. P0; > Q1
D. P0; Q0
Answer: C
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A) shareholders. B) management. C) values. D) customers.
The principle of diminishing marginal utility says that:
a. as more of a good or service is consumed, demand decreases. b. as more of a good or service is consumed, the price will rise. c. the marginal utility of additional units consumed increases. d. an increase in income causes demand to increase. e. the marginal utility of additional units consumed decreases.
If it costs a firm $10 to produce a good and the same good sells for $7 abroad, then this firm is engaging in
A) profit maximization. B) price discrimination. C) price differentiation. D) dumping.
To correct for negative externalities, the government
A. can impose a tax. B. can provide a subsidy to consumers. C. should create a public good. D. should allow the price system do the correction.