Refer to the above graph showing the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P 1 to P 2?
a. An increase in consumer incomes
b. An increase in production costs
c. An increase in the price of a substitute product
d. A decrease in the price of a complementary product
Answer: b. An increase in production costs
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If the price of videotapes decreases, then the _____
a. marginal utility of videotapes will decrease b. marginal utility of videotapes will increase c. marginal utility per dollar of videotapes will decrease d. marginal utility per dollar of videotapes will increase e. total utility of videotapes will increase
Which of the following would not be a negative production externality associated with tire production?
a. smoke from the tire factory worsens the city's air quality b. toxins from the tire-making process seep into the area's ground water c. neighbors experience the bad smells that come from the tire factory d. the rubber used to make tires could be used to make something else e. all of these are negative production externalities
Suppose Vincent is willing to pay $350 to buy a new bike. Loss aversion implies that if Vincent had just bought the bike, you would:
A. have to pay him less than $350 to part with it. B. have to pay him exactly $350 to part with it. C. not be able to get him to part with it for any amount of money. D. have to pay him more than $350 to part with it.
To prevent bank runs and the consequent bank failures, the United States established the ________ in 1934 to provide deposit insurance
A) FDIC B) SEC C) Federal Reserve D) ATM