If firms in a monopolistically competitive industry are incurring losses, in the long run firms will leave this industry until
A. MC = ATC.
B. P = MC.
C. MR = ATC.
D. P = ATC.
Answer: D
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After a price ceiling of $8 is placed on the market in the graph shown, which area represents consumer surplus?
A. A + C
B. A + B
C. A + B + C
D. A + B + C + D + F + G
The slope of an individual's "consumption-leisure" budget constraint is:
a. 24 hours minus the number of leisure hours. b. total consumption divided by the wage rate. c. the real wage rate. d. the negative of the real wage rate.
(Consider This) Brinley is the hottest new pop singer, but his agent discovers that Internet sales of Brinley's music have been poor due to Internet piracy, but concerts are regularly sold out and merchandise (such as T-shirts) sells well. If Brinley
wants to enhance profits, economists would most likely recommend that he: A. charge more for downloads, concerts, and merchandise. B. cut prices for downloads, concerts, and merchandise. C. only give concerts. D. keep prices of downloads low and raise prices for concerts and merchandise.
People's tendency to prefer the "default" option over other options is known in prospect theory as the:
A. Anchoring effect B. Mental accounting effect C. Status quo bias D. Confirmation bias