Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1
A) not enough consumers want to buy iced tea.
B) the quantity supplied is economically efficient but the quantity demanded is economically inefficient.
C) economic surplus is maximized.
D) the quantity supplied is less than the economically efficient quantity.
D
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Refer to the payoff matrix below. Which of the following is true for Best Lights?
A) They do not have a dominant strategy.
B) Their pure strategy is to set a Low Price.
C) They do not have a pure strategy.
D) Their pure strategy is to set a High Price.
The trade-off between the present and future consumption is measured by
A) the money cost of both the present and future consumption. B) the foregone present consumption. C) the difference between the money price of future goods and the money cost of producing them. D) the difference between the money price of present goods and the money cost of producing them.
A friend tells you he is studying the incidence of the corporate income tax. What is the subject of his study?
A) how frequently corporations should be taxed B) how inflation affects the amount of tax revenue collected from firms C) how corporations can aid the government in collecting delinquent taxes D) how the burden of corporate taxation is distributed among stockholders, employees, and consumers
If a decrease in income leads to a decrease in the demand for ice cream, then ice cream is
A) a normal good. B) a neutral good. C) a complement. D) a necessity.