Other things being equal, demand is more elastic if
A. the time period for adjustment is shorter.
B. a family spends a larger percentage of its budget on the good.
C. the good is less expensive.
D. the good is more unique.
Answer: B
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If the bidders at a second-price auction have true values of $8, $7, $6, and $5, the item will sell for
a. $8 b. $7 c. just over $7 d. just under $7
At first marginal product rises and then it falls
Indicate whether the statement is true or false
Bill attends a local basketball game. The teams are very unbalanced, the play is bad, and the score quickly reaches 36-2. At halftime, Bill realizes he's having no fun, leaves the game, and goes home. Bill's behavior is NOT determined by
A. sunk costs. B. utility maximization. C. economic logic. D. None of these is true.
Cartels engage in price fixing in order to:
A. drive out competition. B. retain customers. C. increase profits. D. promote entry.