richer, ceteris paribus, because transaction costs will be lower and trade greater
What will be an ideal response?
Exchange permits trading partners to expand their total output of goods and services as the result of greater specialization in areas where each has a comparative advantage
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Your company sells health food products, and you have recently developed a new high-protein drink (HPD) as well as a high-carbohydrate energy bar (HCE)
As the product manager for the firm, you are responsible for setting the pricing policy for the new products. You are considering a bundled package that includes both products, and you assume the marginal cost of production is zero for planning purposes. You have identified four basic types of consumers who may buy these new products, and their reservation prices for the two new products are provided in the following table: Type HPD HCE A $0.50 $1.80 B $0.80 $1.10 C $1.00 $0.90 D $1.40 $0.30 a. Suppose you sell the two products separately, and each buyer is expected to purchase one unit of the product per day. Which prices for HPD and HCE maximize daily revenue? What is your daily revenue from selling both products to the four customers under separate pricing? b. If you offer the two products under a pure bundling strategy, what is the revenue maximizing bundle price? What is the daily sales revenue from the pure bundling scheme? c. Please develop a mixed bundling strategy that generates higher daily sales revenue than the pure bundling strategy. What is the daily sales revenue generated under mixed bundling?
The component of aggregate expenditure that is not like other components because, in general, it is directly neutral to macroeconomic changes is:
A. consumption spending. B. investment spending. C. government spending. D. net export spending.
A monopolistically competitive firm chooses the quantity to produce where
a. price equals marginal cost. b. demand equals marginal cost. c. marginal revenue equals marginal cost. d. Both a and c are correct.
Perfect competition and monopolistic competition are similar because under both market structures,
A. there are many firms. B. production takes place at the least-cost combination. C. differentiated products are produced. D. entry is difficult.