In early 1996, the upper Midwest suffered record cold, with wind chills of 50° below zero or worse. Yet, grocery stores stocked fresh citrus fruit (which was clearly not grown locally). Why did grocers stock the fruit?
A. The desire for profit
B. Concern for their neighbors
C. The need to dispose of excess production
D. Government orders to distribute fruit
E. All of the responses are correct.
Answer: A
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An export industry is said to exhibit increasing returns to scale when
(a) a large-scale organization has significant competitive advantages over small-scale activities. (b) labor utilization increases by 50 percent but export output production increases by only 20 percent. (c) its small-scale business activity has significant comparative advantages over large-scale productions. (d) use of capital increases by 10 percent leads to an increase in export production by 10 percent.
When a baker exchanges a pie for dollars, this is an example of dollars serving as:
A. barter. B. a store of value. C. a medium of exchange. D. a unit of account.
Which of the following is NOT a condition for price discrimination to exist?
A) downward sloping demand curve faced by the firm B) identification of buyers with differing elasticities C) unpatented product or the service D) ability to prevent the resale of the product or service
An example of a negative externality is the:
A. cost you bear when your neighbor has a noisy party and does not compensate you for your discomfort. B. decrease in income to farmers that results from a drought. C. benefit you receive without paying when your neighbor installs a smoke detector. D. decrease in your real income that results when photographic equipment you purchase increases in price because of increased demand by others for these items.