Suppose there is a simultaneous increase in demand and increase in supply. Given this information, we know with certainty that
A) both the equilibrium price and the equilibrium quantity will increase.
B) the equilibrium price will increase, and the equilibrium quantity will increase.
C) the equilibrium quantity will increase.
D) the equilibrium price will increase.
Answer: C
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Refer to Table 10-2. Holding prices constant, when Keira's income changed from $18 to $23, her utility maximizing bundle changed. Based on your answers to her optimal choices at the two income levels, what type of goods are soup and sandwiches?
A) Soup is an inferior good and sandwiches are a normal good. B) Both soup and sandwiches are normal goods. C) Both soup and sandwiches are inferior goods. D) Soup is a normal good and sandwiches are an inferior good.
The authors claim that monopolists will tend to practice stronger conservation of depletable resources than would occur under a perfectly competitive market structure. Why is this true?
A) Monopolists are typically taxed at higher rates than competitive firms, so they will tend to reduce output and revenues in order to minimize their tax expenditures. B) The profit-maximizing decisions of a monopolist tend to generate lower output levels than under perfect competition, so the resource is depleted at a slower rate by the monopolist. C) Common property resource problems do not arise when there is only one seller. D) The lower depletion rate used by monopolists serves as a barrier to entry.