The market demand curve in perfect competition is found by
A) horizontally summing the supply curves of the individual firms in the industry.
B) horizontally summing the demand curves of the individual consumers.
C) utility maximizing behavior of the "representative consumer."
D) the interaction of supply and demand at the individual firm and consumer levels.
Answer: B
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The demand function for tickets to Ireland is expressed as
Qd = 1600 - 0.005P + 2 PEngland + 3rain + 2Y, where P is the price for tickets to Ireland, PEngland is the price of tickets to England, rain is the inches of rain Ireland receives annually, and Y is annual household income. Assuming PEngland is $1000, rain is 30 inches per year, and income is 40,000, how much would the price of tickets to Ireland have to fall for consumers to be willing to buy one more trip per year? A) $15 B) $20 C) $50 D) $200
Which of the following is not a reason why some production continues in households?
a. Some household production requires many specialized resources b. The opportunity cost of household production has decreased over time c. Household production avoids taxes d. There have been important technological advances in household production e. Some households prefer the ability to control production