Consider the market for new cars. During the Great Recession, demand for this product fell by a lot. From this information, we can infer which of the following about this good’s Income Elasticity of Demand?

Consider the debate of whether to legalize marijuana. Suppose a study is undertaken and finds the CPED of marijuana and alcohol is 0.1. Alcohol is considered to be far worse in its effects than marijuana (alcohol leads to drunk driving, wife beating, etc.). So, this study’s finding would be... 

According to a recent survey in an Econ 1 class at LAVC, 11 out of 14 students rated murder as a more frequent cause of death than stomach cancer. However, stomach cancer in fact kills 5 times more people than homicide. What likely explains why these students considered murder to be more frequent?

Suppose I believe that video games are very good for your physical health. I then find a huge number of studies that conclude there are many negative effects from gaming. I ignore this information and persist in my belief. Such persistence would be evidence of which cognitive bias?

Suppose we have the following information: P=$22; q=100; TC=$1,100 for q=0; AVC=$11.00 for q=100; MR=$10 What is the profit for q=100?

Suppose we have a market where there are 100 firms and the economic profit to each firm is $10,000. If the market is competitive, what we do know will happen in the long run?

Consider the following information for a firm known as “Emma Industries” that has a monopoly over the product known as Fuhrmanns. q P TR TC Profit MR MC ∆Profit 0 30 5 --- --- --- 1 27 16 2 24 13 3 21 15 4 18 22 5 15 -10 How much will the firm “Emma Industries” produce?

According to this course, a competitive market is more efficient than a monopoly. 

Suppose a firm in a competitive market is earning zero economic profits. As a result, what will it do in the long run?

Suppose a competitive firm for organic farming is at a point where profits are zero. Suddenly an economic boom occurs so consumers’ incomes increase. In the short run, what happens to the P and q?

Again, suppose a competitive firm for organic farming is at a point where profits are zero. Suddenly an economic boom occurs so consumers’ incomes increase. In the long run, what happens to Q?

In a monopoly…

For which of the following does the firm produce when MR equals MC?

Suppose the company of DeBeers which supplies diamonds to retailers is making positive profits initially. Its market is a monopoly. Due to an economic boom, income increases. In the long run, what happens to the P and q?