How is future price related to current demand?
a. If the price is expected to rise, current demand will drop.
b. If the price is expected to fall, current demand will rise.
c. If the price is expected to rise, current demand will rise.
d. Future price is not related to current demand.
Ans: c. If the price is expected to rise, current demand will rise.
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Refer to Figure 29-1. The appreciation of the dollar is represented as a movement from
A) C to A. B) C to B. C) D to C. D) B to A.
The above figure shows the payoff to two gasoline stations, A and B, deciding to operate in an isolated town. Suppose a $30 fee is required to enter the market. If firm A chooses its strategy first, then
A) firm A will not enter. B) neither firm will enter. C) both firms will enter. D) firm A will enter and firm B will not.
There are two independent dealers for Sporto automobiles in a large city
The dealers decide to run a cooperative advertising campaign in which both dealers are listed in local newspapers ads, and they can purchase larger ads that are more likely to attract attention and generate more auto sales if the dealers commit more funds to the joint advertising budget. Is this an example of a cooperative constant-sum game? A) Yes, each firm can contribute zero to 100 percent of the advertising budget, so this is a constant-sum game. B) Yes, all negotiated outcomes between two firms are cooperative and constant-sum situations. C) No, the outcome of the advertising campaign depends on how much money the firms contribute to the campaign, so it is not constant sum. D) No, the firms are independent, so their interaction cannot be cooperative.
People make mistakes in allocating their time
a. because they always act irrationally b. despite always having expectations fulfilled c. only when leisure is a normal good d. because acquiring information is costly e. more often when the cost of making a mistake is high