Refer to the scenario above. Which of the following is true if David's maximum willingness to pay for the good falls to $380?
A) James will win the auction.
B) Rachel will not take part in the auction.
C) The owner of the good will earn the same average revenue.
D) David will win the auction.
C
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
You choose to get a flu shot each fall and your roommate chooses not to get a flu shot. For your roommate, you getting a flu shot is a
A) positive externality. B) negative externality. C) transactions cost. D) property right.
The above figure shows a perfectly competitive firm. If the market price is more than $20 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
Refer to Table 3-1. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. If the price of Kona coffee rises from $4 to $5, the market quantity demanded would
A) decrease by 115 lbs. B) decrease by 35 lbs. C) increase by 35 lbs. D) increase by 115 lbs.