Refer to Figure 14-1. Should Lexus lower its price in order to deter BMW's entry into the luxury hybrid automobile market?
A) Yes, it will drive BMW out of the market.
B) No, it should keep the same price and work to capitalize on its brand loyalty.
C) In terms of profit earned, it makes no difference whether Lexus lowers its price or not; in either case it will make $280 million profit if BMW enters.
D) No, because BMW will enter the market regardless of Lexus' decision about its price.
A
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Econville opens up trade with its neighboring countries. This causes the number of sellers of science fiction novels to increase. What happens to the equilibrium price and quantity?
a. Price and quantity both increase. b. Price decreases, and quantity increases. c. Price increases, and quantity decreases. d. Price and quantity both decrease.
At least in the short run, each of these factors has increased competition except
A. the entry of foreign firms. B. the growth in size of many American firms. C. the rise of the service industries. D. the rise of new industries.
In the short run, marginal cost is minimized when
A) MPL is maximized. B) MPL equals zero. C) APL is maximized. D) APL equals zero.
Why did high fertility of the early population occur, according to Hughes and Cain (2011)?
(a) More than half of the population were at ages where fertility is high—in 1820, for example, the median American was less than 17 years old. (b) A nation composed mainly of farmers and people planning to farm had every reason to create large families. (c) Children can be considered investment goods and the rate of return on a child born to a farm family was relatively high. (d) High fertility occurred due to all of the above reasons.