Explain why movie theaters charge more for evening performances than for matinees
If prices were the same at all times, most customers would come to evening shows, and afternoon shows would be empty. By charging less in the afternoon, theaters can better fill their seats without having to expand to handle evening crowds while the building is deserted in the afternoon.
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Consider two individuals, Artie and Deena, who produce wind chimes and sun dials. Artie's and Deena's weekly productivity are shown in Table 3.4. Which of the following is TRUE?
A) Artie has a comparative advantage in producing wind chimes but not sun dials. B) Artie has a comparative advantage in producing sun dials but not wind chimes. C) Artie has a comparative advantage in producing both goods. D) Artie does not have a comparative advantage in producing either good.
According to the aggregate expenditure model, when faced with unwanted inventory, firms
A) do nothing and wait for equilibrium to be restored. B) are forced to go out of business. C) immediately cut prices. D) decrease production. E) increase production.
In the above figure, which point represents an economy which is at the peak part of a business cycle?
A) point F B) point G C) point I D) point K
Cheating in a cartel is more likely to occur if the industry
A) has a large number of firms. B) has homogeneous products. C) has easily observable prices. D) has little variation in prices.