A change in an equilibrium price can result from I. A change in demand II. A change in supply
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C
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Why is a construction worker never likely to earn as much as a famous athlete?
a. Compensating differentials create a higher wage for professional athletes. b. Technological progress has advanced less in the construction industry then in sports training. c. Productivity levels are low in the construction industry due to the high number of people willing to be construction workers. d. A construction worker can provide his services to only a limited number of customers.
In evaluating policy effectiveness, economists rely on:
A. positive analysis. B. Economists can never fully analyze any real-world policy effectiveness. C. normative analysis. D. both normative and positive analysis.
If an oligopolist reduces the price of its product relative to its competitors: a. some customers will switch to rival firms
b. the number of customers it has will likely remain unchanged. c. some customers will switch from rival firms to buy from him. d. rival firms are unlikely to react.
Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, price equals this firm?s marginal cost. Assuming price exceeds average variable cost, to maximize profits Cathy's should
A. make no adjustments as they are already maximizing their profits. B. decrease their output. C. increase their output. D. stop producing since it is earning a loss.