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change in the price of a good divided by the change in the quantity of the
good demanded
4. The distinction between demand and the quantity demanded is best made by
saying that
5. The U.S. Postal Service printed 150,000 sheets of stamps depicting Bill Pickett,
but recalled them when the USPS realized the image on the stamp was Bill's
brother, Ben, instead. They were unable to recall 183 sheets that had already been
sold. The effect of this recall was to
drastically reduce the demand for the stamps, causing their equilibrium
price to fall
have no effect on either supply or demand for the Bill Pickett stamps
because there is no market for them
drastically reduce the supply of the Bill Pickett stamps, causing their
equilibrium price to rise
increase the supply of the Bill Pickett stamps, causing their equilibrium
price to fall.
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2. in a perfectly competitive market,
3. The demand for clothing increases. As a result, the price of Clothing increases
above
the minimum average cost of producing it. In the long run, if the
clothing industry is
Perfectly competitive and is a constant-cost industry,
the supply of clothing will increase but the price will not
the price of clothing will increase but the price will not
competitive markets
oligopolistic markets
monopolistic markets
competition will ensure common goals among the owners and managers of
a firm
earn enough profits to keep their shareholders happy without trying too
hard to hold costs down
technological considerations
their costs of organizing are higher than the cost of collusion by the
suppliers
when combined, their losses are small for the group as a whole
7. The fact that U.S. managers' salaries are about four times higher than those of
comparable managers in Japan, where banks control firms more closely, is
probably
due to the fact that the U.S. economy is much less competitive
due to the fact that there are more natural monopolies in the United States
3. Economists generally call the effect of an agreement on others that is not taken
into account by the parties making the agreement
an externality
welfare loss
Pareto optimality
excess burden
economies of scale
to decrease competition
5. A company buys another company in the same supply chain, but either in front
of it or behind it in the supply chain. This is called
a horizontal acquisition
a vertical acquisition
a conglomerate
a joint venture
a horizontal acquisition
a vertical acquisition
a conglomerate
a joint venture
2. A group of countries that allows free trade among its members and puts up
common barriers against all other countries' goods is
Called
a tariff-free zone
an autarky
if its opportunity cost of producing corn is higher than the opportunity cost
in other countries
played little role in growing income disparity because all Americans are
consumers who have enjoyed lower prices
played little role in growing income disparity because while some jobs
were lost, the gain in jobs balanced out those that were lost
6. Most economists
Exceed the marginal cost of diamonds but equal to the average total cost
of diamonds.
Exceed both the marginal cost and the average total cost of diamonds.
2). Using 100 workers and 10 machines, a firm can produce 10,000 units of
output; using 250 workers and 25 machines, the firm produces 21,000 units of
output. These facts are best explained by:
Economies of scope
Diseconomies of scale
Economies of scale
3). Suppose that college tuition is higher this year than last and that more
students are enrolled in college this year than last year. Based on this
information, we can best conclude that:
despite the increase in price, quantity demanded rose due to some other
factors changing.
There are many substitutes for a monopolists product whereas there are
no substitutes for a competitive firms product.
Alcoholic beverages
Pollution
Education
6). the theory that quantity supplied and price are positively related, other things
constant, is referred to as the law of:
supply
profit maximization
opportunity cost
demand
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