An inferior good is:
a. any good of low quality.
b. one that consumers buy less of at a higher price.
c. one that consumers buy less of as their income rises.
d. one that has few substitutes.
e. any good made with inexpensive labor.
c
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If the production of a good causes an external cost, then the efficient quantity is
A) equal to the quantity at which the marginal benefit equals marginal cost. B) less than the quantity at which the marginal benefit equals the marginal cost. C) more than the quantity at which the marginal benefit equals the marginal cost. D) the quantity at which the marginal private benefit is greater than the marginal social benefit. E) None of the above answers is correct.
Wal-Mart created a competitive advantage with its inventory system to reduce the ratio of cost of goods sold to sales, expecting:
a. to enjoy huge economic profits forever. b. that its rivals will never imitate their strategy and it will continue to enjoy positive economic profits. c. that its rivals will immediately do the same thing and it will end up earning zero profits. d. to enjoy economic profits for a few years before its rivals caught up. e. that it will at least be able to cover its fixed costs.