What would happen in the market for prescription drugs if people begin to view over-the-counter remedies as a good substitute for prescription medications?
A. The demand for prescription medications will decrease.
B. Prescription medications will become an inferior good.
C. There is a downward movement along the demand curve for prescription medications.
D. There is an upward movement along the demand curve for prescription medications.
Answer: A
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A model:
A) is often based on simplifying assumptions that are not necessarily true. B) can be tested without data or statistics. C) is a more complex representation of reality than a theory. D) can never be used to predict the future but helps explain the past.
The ability to control a scarce resource or input is a characteristic of perfect competition.
Answer the following statement true (T) or false (F)
In a graph of a firm's short-run total costs and total revenue, the total cost and the total revenue curves, respectively, will intersect the vertical axis
A) above the origin, above the origin. B) above the origin, at the origin. C) at the origin, at the origin. D) below the origin, below the origin.
All these are characteristics of a monopoly except,
a. There is one seller of the product b. Has few substitutes c. Controls a large share of the market d. Controls a small share of the market