Refer to the information provided in Figure 6.10 below to answer the question(s) that follow.
Figure 6.10Refer to Figure 6.10. Kyle would increase his consumption of turkey sandwiches from 7 to 9 per week if their price fell from $6 to $4. This illustrates the idea of
A. consumer surplus.
B. cross-price elasticity of demand.
C. technical efficiency.
D. the law of diminishing marginal utility.
Answer: D
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Monopolistic competition is characterized by
A) relative ease of entry into the market. B) a standard, undifferentiated product. C) persistent long-run economic profits. D) production at minimum average cost in the long run.
Teddy's Bear Shop operates in a perfectly competitive market where the prevailing price is $15 . Teddy's marginal cost curve crosses his average total cost curve at $20 . The marginal cost curve crosses his average variable cost curve at $17 . In the short run, Teddy's Bear Shop
a. should operate at a lower output level where it can suffer less of an economic loss b. will suffer an economic loss, but should continue to operate at the minimum of its average variable costs c. will just break even, with neither a profit nor a loss, and should operate d. will suffer an economic loss and should shut down e. should operate at a higher output level where it can suffer less of an economic loss
Resale price maintenance involves a firm
a. colluding with another firm to restrict output and raise prices. b. selling two individual products together for a single price rather than selling each product individually at separate prices. c. temporarily cutting the price of its product to drive a competitor out of the market. d. requiring that the firm reselling its product do so at a specified price.
Which of the following expenditures would not be included in GDP?
a. All of these choices would be counted in GDP. b. Purchase of a new lawnmower. c. Purchase of a silver cup previously sold new in 1950. d. Purchase of a ticket to the latest movie.