Refer to Table 5.1. Hector should specialize in the production of
A) bracelets.
B) tiaras.
C) both products.
D) neither product.
B
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Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right. At the extreme right end, all 100 voters lie to the left. 
width="553" />If Candidate Y is running against Candidate Z: A. Both candidates will have an incentive to move to the left. B. Both candidates will have an incentive to move toward each other's position. C. Candidate Y will have an incentive to move to the left, and Candidate Z will have an incentive to move to the right. D. Neither candidate has any incentive to move.
Since 1300, the inflation rate has been greater than 2 percent per year and reaching its highest peaks
A) primarily between 1700 and 1900. B) primarily after 1900. C) primarily between 1400 and 1500. D) primarily before 1400. E) primarily between 1500 and 1700.
The price of salsa rises. How does the increase in the price of salsa affect the supply of salsa?
A) The supply of salsa increases. B) The supply of salsa decreases. C) There is no change to either the supply of salsa or the quantity of salsa supplied. D) There is no change to the supply of salsa, but the quantity of salsa supplied increases. E) There is no change to the supply of salsa, but the quantity of salsa supplied decreases.
A single-price monopolist is inefficient because
A) MR = MC. B) P > ATC. C) it creates a deadweight loss. D) it increases producer surplus.