One thousand adults live in Milltown. Every day, they all leave work at 4:30 p.m., arrive home at exactly 5:00 p.m., and go to bed at 9:00 p.m. Three fundraisers, Alpha, Beta, and Charlie, have targeted Milltown's population. To get a donation, they must call Milltown's residents after they get home from work but before they go to bed. Because the charities raising the funds are identical, the first to call a willing donor will get the donation. To an economic naturalist, this scenario would explain why:
A. fundraising calls are outsourced to Asian countries.
B. telephone fundraisers have become less popular.
C. fundraising calls typically occur shortly before people go to bed.
D. fundraising calls typically occur shortly after people arrive home from work.
Answer: D
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A market in which the Herfindahl-Hirschman Index exceeds 1,800 is considered to be
A) competitive. B) not competitive. C) moderately competitive. D) purely competitive. E) either a monopoly or monopolistic competition.
A rise in the income tax rate will
A) raise the multiplier and raise equilibrium income. B) lower the multiplier and raise equilibrium income. C) raise the multiplier and lower equilibrium income. D) lower the multiplier and lower equilibrium income.
Thomas Edison once complained that he was not making a profit selling light bulbs because his plants were operating 25 percent below capacity. He estimated that he could increase output 25 percent with a 2 percent increase in the cost of production. He sold the 25 percent on the foreign market at a price below what he called the “cost of production.” We can deduce that Edison really meant
A. marginal cost was below average cost but less than marginal revenue. B. average cost exceeded variable cost, which exceeded marginal revenue. C. variable cost exceeded fixed cost but was less than marginal revenue. D. marginal cost was above average cost but greater than marginal revenue.
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