A shift in the demand curve occurs when
a. suppliers place more goods on the market.
b. the price of a good rises.
c. consumers want to buy more or less than before at a given price.
d. the price of the good falls.
c
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Which of the following is true when profit-maximizing firms in a competitive market are allowed to freely emit negative externalities on society?
a. Consumers are paying a market equilibrium price that reflects the full social marginal cost of production. b. Consumers are paying a market equilibrium price that reflects only the external marginal cost of production. c. Consumers are paying a market equilibrium price that is less than the socially efficient price, and consuming more than the socially efficient quantity. This means society is implicitly subsidizing producers by allowing them to pollute. d. None of the above is correct.
The variation in the rate of return one can expect from ownership of stocks will generally be smaller if
a. all of the funds are invested in a specific sector of the economy such as the automobile industry. b. a diverse set of stocks is held over a lengthy period of time such as 30 or 40 years. c. all of the funds are invested in a single stock. d. the funds are invested for a relatively short period of time.
When considering choice architecture, a nudge:
A. allows anyone who wants to go in a different direction to do so. B. does not take away any options. C. is a gentle push in a particular direction. D. All of these statements are true.
Refer to Table 7.1, which shows the relationship between the price that Gladys charges for a product and the quantity of that product that Gladys sells. The marginal revenue that Gladys receives from selling the fifth unit of output is:
A. $5, because that is the price per unit of output that Gladys receives. B. $5, because that is the quantity that Gladys sells. C. $25, because Gladys sells five unit of output at a price of $5. D. $1, because Gladys earns $1 more in revenue by increasing her output to five units from four units.