Hannah and Marla plan to drive cross-country in Marla’s car after graduation and split the estimated $300 gas costs and 30 hours of driving. Their friend Sarah asks to join the trip and split the costs. Which of the following accurately describes the difference between average and marginal costs of adding a third traveler to the trip?
a. Average costs are increased from $300 to $450; marginal costs are reduced to 10 hours of driving per person.
b. Average costs of travel remain the same; marginal costs are increased by Sarah’s share of beverages and snacks.
c. Average costs fall from $150 to $100 per person; marginal costs are minimal and offset by Sarah’s help with driving.
d. Average costs are increased by adding a third person; marginal costs are unchanged because the car is already going.
c. Average costs fall from $150 to $100 per person; marginal costs are minimal and offset by Sarah’s help with driving.
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In the real business cycle model, fluctuations in employment are explained by ________
A) changes in the composition of household assets B) intertemporal substitution as real wages and real interest rates changes C) changes in the marginal propensity to consume D) the impact of a change in price on quantity demand and quantity supplied in goods markets
A market tends to be monopolistic if
a. The good has too many substitutes b. The good has very few substitutes c. There are too many rivals d. The good has too few complements