Engineers for The All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output. Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases.
A. marginal costs to increase
B. average costs to increase
C. average costs to decrease
D. average costs to remain constant
Answer: D
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In the case of Intimate Bookshop v. Barnes & Noble, Intimate alleged that Barnes & Noble
a. was bundling products in order to reduce competition. b. used technological advances to sell at lower prices. c. was buying books at discriminatory prices. d. had merged with other competitors in an effort to gain monopoly power.
Why is the effect of a change in price of a substitute good potentially ambiguous?
What will be an ideal response?
If there is a decrease in industry supply while the industry demand curve remains the same, then an individual firm in a perfectly competitive industry currently earning profits will see its profits
A. decrease. B. increase. C. not change. D. impossible to determine.
The important characteristic of normative statements is that they
A) explain what really exists. B) are based on somebody's values and cannot be tested. C) explain what normally happens in the real world. D) help guide us to what will normally occur if some economic variable changes its value. E) do not use the ceteris paribus assumption.