The study of how one business firm sets its prices would fall under the study of:
a. Economic growth
b. Microeconomics
c. Income distribution
d. Macroeconomics
Answer: b. Microeconomics
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Assume that the market for consumer gasoline is perfectly competitive. When one additional seller (gas station) enters the market,
A) then at least one other seller must exit the market. B) the price of gasoline increases. C) the price of gasoline is left unaffected. D) the price of gasoline decreases. E) None of the above is correct.
Which of the following must be true about homothetic tastes:
A. Utility functions that represent those tastes are homogeneous of degree 1. B. There exists a utility function that represents those tastes and is homogeneous of degree 1. C. There exists a utility function that represents those tastes such that the expenditure function is homogeneous of degree 1. D. The indirect utility function is homogeneous of degree zero. E. Both (a) and (c). F. Both (b) and (c). G. Both (b) and (d) H. None of the above.
If the interest rate is 7.5 percent, the present value of $500 to be received three years from today is $477.50
Indicate whether the statement is true or false
Expansion Your firm prints the novelty baseball cards that candy makers include in their bubblegum. Since you regularly sell 100,000 cards per week, you invested in four separate production lines that can each produce 25,000 cards in a standard 40 hour
work week. Now a few of the candy makers are signed long term contract that will increase their orders so that you will need to produce 150,000 cards per week. If you can invest in two new production lines at the same cost as your previous four, what does this imply for the shape of your long-run marginal cost curve? What does it imply for changes in your pricing?