Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then
A) the demand for hot dogs will increase.
B) the demand for hot dog buns will increase.
C) the quantity demanded of hot dog buns will increase.
D) the quantity demanded of hotdogs will decrease.
E) the demand for hot dog buns will decrease.
B
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Positive externalities arise when
A) an unprofitable firm is shut down. B) a profitable firm is regulated. C) tax rates are reduced. D) production of a good generates benefits that spill over to third parties.
If high-level executives of a company award themselves sizable bonuses even though the firm they manage is making losses and performing poorly, this event is most likely to arise because of
a. the law of diminishing marginal returns. b. competition among business firms for high-level executives. c. economies of scale. d. the principal-agent problem.