In the case study discussed in the chapter, the electronics firm was losing money by selling its calculators at a price that was below average cost.
Answer the following statement true (T) or false (F)
False
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Economics is the study of how people
a. vote for political leaders who decide what is to be produced b. make choices to produce and consume goods and services c. create social institutions that maximize economic well-being d. develop value systems that affect their consumption choices e. form customs and traditions that influence consumption
What do economists call the tendency of people at a higher wage rate to choose free time over work?
a. substitution effect b. income effect c. diversion theory d. leisure theory
Business cycles vary in:
A. none of the answers given is correct; business cycles are by definition recurring waves that rise and fall in a periodic pattern. B. the length of recessions only. C. both the length of recessions and the time between recessions. D. the time between recessions only.
Which of the following is NOT a requirement for a firm to be able to price discriminate?
A) monopoly power B) groups of customers with different willingness to pay for the good C) economies of scale D) ability to keep the members of different customer groups separate E) ability to prevent resales of the product by customers