Assuming that beer is a normal good, what will happen to the demand for beer near college towns if student income increased?
a. Demand will fall because students love these beers
b. Demand will fall
c. Demand will rise
d. Supply would rise
c
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Suppose the market for bottled water is served by two oligopolists. If they reach an agreement to restrict production and charge a price above marginal cost, then:
A. neither firm will have an incentive to cheat on the agreement since it benefits them both. B. their agreement is likely to eventually collapse. C. they will charge a higher price than a monopolist would have charged. D. they will earn a larger profit than a monopolist would have earned.
Eggs have a supply curve that is linear and upward-sloping and a demand curve that is linear and downward-sloping. If a 2 cent per egg tax is increased to 3 cents, the deadweight loss of the tax
a. increases by exactly 50 percent. b. increases by less than 50 percent and may even decline. c. increases by more than 50 percent.
Persuasive advertising is mostly used for
A. a persuasive good. B. an inferior good. C. an experience good. D. a search good.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The best point for society would be
A. either Point B or Point C, as the total amount being produced at either of these points is approximately the same. B. at any of the labeled points, as all of the points represent an efficient allocation of resources. C. Point C, as at this point there are approximately equal amounts of LCD and OLED televisions being produced. D. indeterminate from this information, as we don't have any information about the society's desires.