A technological innovation that reduces a firm's marginal cost will lead to:
A. a decrease in the firm's supply.
B. an increase in the quantity supplied by the firm, but no change in the firm's supply.
C. an increase in the firm's supply.
D. a decrease in the quantity supplied by the firm, but no change in the firm's supply.
Answer: C
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When sellers have more information about hidden characteristics of a good than buyers have, more low-quality units are likely to be sold than high-quality units. This is
a. the law of diminishing marginal returns b. the law of natural selection c. the winner's curse d. the lemons problem e. the problem of common pools
If an increase in the price of good X leads to an increase in the consumption of good Y, then goods X and Y are called:
A. substitutes. B. inferior goods. C. complements. D. normal goods.
In the above figure, what is the opportunity cost of one bushel of soybeans?
A. 2 bushels of corn B. 1 bushel of corn C. 0.5 bushels of corn D. unable to determine
Refer to the above table. Suppose the U.S. government (but not Europe) offers a $10 million subsidy?
What will be an ideal response?