Suppose that your public library charges a fixed monthly membership fee of $12. Members are allowed to check out as many books as they want under this plan. The average member checks out 4 books per month
Suppose that your public library changes its policy. Now each book costs $3 to check out but there is no longer a monthly membership fee. What effect do you think the new policy will have on the total number of books checked out from your library each month? The new policy is likely to ______the number of booked checked out because ________.
A) reduce; the marginal benefit of checking out books is now lower under the new policy
B) increase; the average benefit of checking out more than 4 books is now higher under the new policy
C) reduce; the marginal cost of checking out books is now higher under the new policy
D) leave unchanged; members have already shown that they are willing to pay $12 to check out 4 books per month
E) leave unchanged; the average cost of the library service is the same under both plans
D
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The longer the time that has elapsed since the price of a good changed, the
A) more elastic the demand for that good. B) steeper the demand curve. C) less elastic the demand for that good. D) smaller the amount of that good bought. E) fewer substitutes available for the good.
A consumer's optimal choice is affected by income, prices of goods, and preferences
a. True b. False Indicate whether the statement is true or false
When managers in oligopolistic firms make decisions that affect output or price, they must
A. register with the Antitrust Division of the Department of Justice. B. anticipate the reactions of their rivals and plan accordingly. C. inform the regulators of their industry about their plans. D. also be sure they erect barriers to entry to prevent new entrants from affecting their plans.
The price elasticity of supply is the:
A. change in the price divided by the change in the quantity supplied. B. change in the quantity supplied divided by the change in price. C. percentage change in the price divided by the percentage change in the quantity supplied. D. percentage change in the quantity supplied divided by the percentage change in price.