Suppose that the demand curve for wheat is downward sloping and the price per bushel increases from $4.50 to $5.50. We would expect:
a. The demand for wheat to increase
b. The quantity demanded of wheat to decrease
c. The quantity demanded of wheat to increase
d. Producers to reduce the number of bushels produced
Answer: b. The quantity demanded of wheat to decrease
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A firm sells grapefruit in a perfectly competitive market at a price of $1.50 per pound. The firm's marginal revenue: a. equals $1.50
b. is less than $1.50. c. is greater than $1.50. d. cannot be determined from the information provided.
The process by which people isolate purchases and fail to consider all consumption options simultaneously is known as:
A. framing. B. mental accounting. C. anchoring. D. the endowment effect.
Refer to Scenario 13.2 below to answer the question(s) that follow. SCENARIO 13.2: The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of $5 for providing cable service to each household.Refer to Scenario 13.2. If Fun Cable Company were to be awarded the exclusive right to provide cable service in Stratospheria,
how much profit would it earn? A. $0 B. $62,500 C. $75,000 D. $112,500
Pirates have been intensely attacking ships off the shore of Somalia this year. Boat owners have reportedly coughed up more than $30 million in ransom and insurance premiums have shot up
The pirate activity and increase in premiums means that the expected wealth of boat owners who sail near Somalia is ________. A) decreasing B) increasing C) staying the same D) decreasing only if they have insurance