A search good is a product
A) with qualities that consumers lack the expertise to assess without assistance.
B) that emphasizes the features of its product.
C) with characteristics that enable an individual to evaluate the product's quality in advance of a purchase.
D) that an individual must consume before the quality can be established.
Answer: C
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The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house. If there is a 20 percent chance that the home could be entirely destroyed, what is the person's cost of risk?
A) $10,000 B) $20,000 C) $30,000 D) $40,000
Forecasts of an inevitable exhaustion of essential natural resources are “simply beside the point” because higher prices (i) reduce quantity demanded; (ii) stimulate supply; (iii) stimulate alternative technology.
A. i only. B. ii only. C. iii only. D. i, ii, and iii.
The primary objective of a cartel is to:
A) maximize the amount of profit received by each member of the organization.
B) maximize the joint profits of the members of the organization.
C) ensure each member of the organization some minimum amount of profit.
D) maximize the average profits of the members of the organization.
The law of diminishing marginal product is responsible for
A) economies of scale. B) constant returns to scale. C) diseconomies of scale. D) none of the long-run relationships.