Michael is a college student. He can either buy a textbook for $100 or save up for a road trip he wants to take during the summer. This illustrates the principle that
a. trade can make everyone better off.
b. people face trade-offs.
c. rational people think at the margin.
d. people respond to incentives.
b
Economics
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A marginal cost pricing rule sets marginal cost equal to
A) minimum average variable cost. B) price. C) average cost. D) marginal revenue. E) the smaller of price or marginal revenue.
Economics
If different markets for a product produced by a monopolist can be separated and if the elasticity of demand differs between the two markets, then the monopolist will
A) be able to make higher profits by using price discrimination. B) charge a single price in all markets. C) go out of business. D) sell the product in only one of the markets with inelastic demand curves.
Economics