A demand curve that is horizontal indicates that the commodity
A) has few substitutes. B) must be very cheap.
C) has a large number of substitutes. D) is a necessity.
C
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Suppose that consumer income decreases and that hamburger is an inferior good. Which of the following will occur in the market for hamburger?
A) Market clearing price will rise, and equilibrium quantity will rise. B) Market clearing price will fall, and equilibrium quantity will fall. C) Market clearing price will rise, and equilibrium quantity will fall. D) Market clearing price will fall, and equilibrium quantity will rise.
In this welfare effects of a tax graph, we can see that the tax changed consumer surplus from a + b + c to _____.
a. a + b
b. a
c. a – c
d. b + c
A firm that shuts down in the short run experiences losses equal to its
A. total variable costs. B. total variable costs minus its total fixed costs. C. average variable costs. D. total fixed costs.
Related to the Economics in Practice on page 274: According to the Economics in Practice, in industries such as electronics and computers, the patent policies of a country ________ when a company in that industry looks at different countries in which to locate its activities.
A. do not seem to make much difference B. are the only deciding factor C. must be among the most protective in the word D. are the primary deciding factor