How are economic theories like a road map?
a. They both ignore irrelevant details.
b. They both are constantly used by economists.
c. They both refer to important geographic locations.
d. They both reflect the world precisely.
a. They both ignore irrelevant details.
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The figure below shows Ava's demand curve for days in the hospital. The marginal cost of an additional day in the hospital is $200. 
If Ava had to pay the entire marginal cost of spending a day in the hospital, then she would choose to stay ________ day(s).
A. 0 B. 2 C. 3 D. 1
The authors claim that monopolists will tend to practice stronger conservation of depletable resources than would occur under a perfectly competitive market structure. Why is this true?
A) Monopolists are typically taxed at higher rates than competitive firms, so they will tend to reduce output and revenues in order to minimize their tax expenditures. B) The profit-maximizing decisions of a monopolist tend to generate lower output levels than under perfect competition, so the resource is depleted at a slower rate by the monopolist. C) Common property resource problems do not arise when there is only one seller. D) The lower depletion rate used by monopolists serves as a barrier to entry.
Figure 14.5 represents the market for used cars. Suppose buyers are willing to pay $5,000 for a plum (high-quality) used car and $3,000 for a lemon (low-quality) used car. If buyers believe that 80% of used cars in the market are lemons (low quality), how many plums will be supplied in the market?
A. 30 B. 40 C. 70 D. 120
Other things equal, a tariff is:
A. superior to an import quota for Americans because a tariff increases the profits of foreign producers. B. inferior to an import quota for Americans because a tariff increases the profits of domestic producers. C. superior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury.