Assume that a health spa can earn an additional $35,000 of revenue each year from advertising every day in a local newspaper. What must the additional cost of this daily advertising be to make this advertising economically rational?

For a normal good, the

a. income effect is greater than 1.0 b. income effect is negative c. substitution effect is zero d. income effect and the substitution effect work in the same direction e. demand curve is horizontal

As the number of firms in a cartel increases, _____: a. it becomes more difficult for member firms to undercut the agreement. b. it becomes less difficult for member firms to undercut the agreement. c. the price of the good sold in the industry decreases

d. the price of the good sold in the industry increases.