Related to the Economics in Practice on p. 51: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of the Kindle decreases
A. the quantity of Kindles demanded increases and demand for electronic textbooks increases.
B. demand for the Kindle increases and demand for traditional, hard-copy textbooks decreases.
C. the quantity of Kindles demanded increases and the quantity of electronic textbooks demanded increases.
D. demand for the Kindle increases and the quantity of electronic textbooks demanded increases.
Answer: A
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In the above figure, if the price is $8 then there is a
A) surplus of 100. B) surplus of 200. C) shortage of 100. D) shortage of 200.
Television stations have seemingly synchronized their commercial breaks. This is likely an example of
A) tacit collusion. B) explicit collusion. C) mixed strategies. D) pure strategies.
Which of the following is an example of an activity with an external cost?
A. Speeding on the interstate. B. Having to buy batteries for the new remote that came with a TV. C. Keeping your front yard clean. D. Raising honeybees where neighbors on all sides grow apples.
The market tends to underproduce public goods.
Answer the following statement true (T) or false (F)