If two goods are perfect substitutes, then the indifference curves for those two goods would be
A) upward sloping and concave to the origin.
B) downward sloping and convex to the origin.
C) downward sloping and straight.
D) L-shaped.
C
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Two firms, Alpha and Beta, produce identical computer hard drives. They have identical costs, and the hard drives they produce are identical. The industry is a natural duopoly
Alpha and Beta enter into a collusive agreement, according to which they split the market equally. If both firms comply with the agreement A) together they will operate in a way indistinguishable from a monopoly. B) the price of a hard drive will be equal to marginal cost. C) each firm will make zero economic profit. D) the oligopoly will produce more hard drives than a profit-maximizing monopoly would produce.
An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which demand shifter?
A) income B) consumer expectations C) consumer preferences D) prices of other goods