Which of the following best illustrates the concept of "derived demand?"
a. An increase in the wages of auto workers will lead to an increase in the demand for robots in automobile factories.
b. An automobile producer's decision to supply more cars will lead to an increase in the demand for automobile production workers.
c. An automobile producer's decision to supply more minivans results from a decrease in the demand for station wagons.
d. An increase in the price of gasoline will lead to an increase in the demand for small cars.
b
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In the model of monopolistic competition, compared to a firm with a lower marginal cost, a firm with a higher marginal cost will set a ________ price, produce ________ output, and earn ________ profits
A) higher; less; less B) lower; more; more C) higher; more; more D) lower; less; less E) higher; less; more
A reserve requirement of 10 percent means a money multiplier of: a. 1
b. 9. c. 10. d. 11.1.
Which of the following generalizations about the burden of an excise tax is correct?
a. The more inelastic the supply of a product, the larger the portion of an excise tax will be paid by buyers. b. The more inelastic the demand for a product, the larger the portion of an excise tax will be paid by buyers. c. The more elastic the supply of a product, the smaller the portion of an excise tax will be paid by buyers. d. The burden of an excise tax on a product is independent of the elasticity of the supply and demand for the product on which the tax is levied.
When a firm practices price discrimination, for each separate set of consumers it will determine the rate of output at which
A) MR > MC. B) MR = P. C) MR = AVC. D) MR = MC.