Assume consumers eat either rice or pasta for dinner every night. If the price of rice increases, then one would expect to see:
A. an increase in the demand for pasta.
B. a decrease in the quantity of pasta demanded.
C. a decrease in the demand for pasta.
D. an increase in the quantity of pasta demanded.
Answer: A
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The figure above represents the competitive market for slices of key lime pie. If the production is 80 slices per day, the cost of the 80th slice is
A) less than anyone is willing to pay for it. B) more than anyone is willing to pay for it. C) equal to what someone is willing to pay for it. D) indeterminant. E) equal to the deadweight loss from the 80th slice.
Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will ________, and the more elastic the demand for oranges, the ________ will be the effect on the price
A) fall; smaller B) fall; greater C) rise; smaller D) rise; greater
Figure 6-1
In Figure 6-1,
A. D1 is more elastic than D2 below P2 and less elastic above P2. B. D1 is less elastic than D2 at all prices. C. D2 is less elastic than D1 at all prices. D. D2 is more elastic than D2 above P2 but less elastic below P2.
A popular shoe company has a 'buy one, get one half price' offer in which customers who purchase one pair of shoes can purchase a second pair at half price. This is an example of ________ and is ________.
A) price discrimination; only illegal if the practice substantially lessens competition or tends to create a monopoly B) conditional sales; only illegal if the practice substantially lessens competition or tends to create a monopoly C) price discrimination; always illegal per se D) conditional sales; always illegal per se