Which of the following shifts the demand for watches to the right?
a. a decrease in the price of watches
b. a decrease in consumer incomes if watches are a normal good
c. a decrease in the price of watch batteries if watch batteries and watches are complements
d. an increase in the price of watches
e. none of the above
c. a decrease in the price of watch batteries if watch batteries and watches are complements.
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What is the approximate cost to a professional basketball team of giving ten free tickets for a particular game to children in an orphanage?
A) Probably nothing if the game is not sold out. B) The face price of the tickets C) The value of the opportunities forgone by putting on the game, divided by the number of seats (times ten) D) We cannot tell unless we know the value the orphans place on attending.
According to the kinked demand curve model, if there is a modest increase in a firm's variable production costs, what is likely to happen to the firm's profit-maximizing level of output and the amount of profit earned by the firm? Why?
What will be an ideal response?