If Jackie needs special film to go with her new camera, then for her these two goods have what type of relationship?
a. Substitute.
b. Complementary.
c. Nonlinked.
d. Reversed.
e. Insensitive.
QUESTION 2By producing at the point where MR = MC, the firm:
a. is guaranteed a profit.
b. will earn a profit of zero.
c. will lose money.
d. profit is maximized.
e. output.
QUESTION 3If Coke and Pepsi are close substitutes, then if:
a. Coke raises its price, so will Pepsi.
b. Coke raises its price, it will not lose customers to Pepsi.
c. Pepsi lowers its price, it will not hurt Coke.
d. Pepsi lowers its price, so will Coke.
e. Coke raises its price, some customers will switch to Pepsi.
QUESTION 4If a firm decreases output when MR < MC, then:
a. profit will equal zero.
b. profit will increase.
c. profit will decrease.
d. profit will remain the same.
e. the firm is minimizing losses.
QUESTION 5If John purchases 10 percent more compact discs when his income increases 5 percent, then:
a. his total expenditure on compact discs will fall as his income increases.
b. compact discs would be classified as an inferior good.
c. compact discs would be price elastic.
d. compact discs would be income inelastic.
e. compact discs would be income elastic.
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