Jones is hungry, but is willing to postpone lunch as long as he can have a much larger meal at dinner. The compensation of the larger meal at dinner time suggests that Jones
A) is a glutton.
B) acts irrationally because it is best to have three meals a day.
C) has a positive rate of time preference with regard to today's meals.
D) does not consider lunch to be a scarce good.
C
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Which of the following would be a deadweight loss from a tariff?
A) The shift of consumer surplus to government B) The increase in producer surplus C) The decrease in consumer surplus D) The decrease in consumer surplus due to a drop in consumption E) All of the above.
If an investment project costing $2,700 was expected to yield $1,000 (to be received at year end) for each of the next three years, a profit-maximizing entrepreneur would
a. definitely undertake the project. b. never undertake the project. c. undertake the project if the interest rate exceeded 12 percent. d. undertake the project if the interest rate was 5 percent or less.
A firm that uses price discrimination to enhance its net revenues will
a. expand output as long as price exceeds average total costs. b. expand output as long as average total costs are declining. c. charge a higher price to consumers with a more elastic demand for the firm's product. d. charge a lower price to consumers with a more elastic demand for the firm's product.
Suppose the market price for a cup of coffee is $1.25. If Coffee Express's marginal cost of making that cup of coffee is $0.75, its producer surplus from that cup of coffee is:
A. $0.50. B. $0.75. C. $1.25. D. $1.50.