Which of the following is a feature of a contestable market?
A. There is a single firm in the market serving many consumers.
B. There is a single firm in the market serving many consumers and the market price is equal to marginal cost.
C. The market price is equal to marginal cost.
D. There are several firms in the market serving many consumers.
Answer: B
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Tabitha shares a flea market booth with her sister. Her share of the rent is $150 per month. She is considering moving to her own, larger booth which she will not have to share with anyone. The larger booth rents for $450 per month
Recently, you ran into Tabitha in the grocery store and she tells you that she has rented the larger booth. Tabitha is as rational as any other person. As an economics major, you rightly conclude that A) Tabitha figures that the additional benefit of having her own booth (as opposed to sharing) is at least $300. B) Tabitha did not have a choice; her sister was overcharging her. C) the cost of having one's own booth outweighs the benefits. D) Tabitha figures that the additional benefit of having her own booth (as opposed to sharing) is at least $450.
Explain the concept of network externalities
What will be an ideal response?
For consideration of such issues as labor's productivity growth nationwide, the relevant measure is the
A) marginal product of labor. B) average product of labor. C) total product of labor. D) wage. E) cost of capital.
Bertha holds some of her savings as currency and coins placed in her sewing basket. This is an example of
A) precautionary demand for money. B) asset demand for money. C) transactions demand for money. D) wealth demand for money.