If demand is highly elastic and supply shifts to the left:
A. price and quantity will hardly change at all.
B. price will rise significantly; quantity hardly changes at all.
C. price will hardly change at all; quantity will decline significantly.
D. price will rise significantly and quantity will fall significantly.
Answer: C
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If a change is a Pareto improvement, then
A) we also achieve Pareto efficiency. B) consumer surplus is maximized. C) it also passes the cost-benefit test. D) the distributional effect is likely to be regressive.
The maximin criterion can be defined as which of the following?
a. One seeks the maximum of the minimum payoffs to the various available strategies. b. One seeks the minimum of the maximum losses among the various available strategies. c. One seeks the maximum of the minimum losses to the various available strategies. d. One seeks the maximum of the maximum gains of the various available strategies.
The introduction of a new cost-effective production technique is likely to __
Fill in the blank(s) with the appropriate word(s).
Consumers in Beachland consume only two goods, sodas and DVDs. If they spend $10 on sodas and $90 on DVDs a month, how many sodas and DVDs are in their CPI market basket if the price of a soda is $1 and the price of a DVD is $9?
A) 9 sodas and 1 DVD B) 1 soda and 9 DVDs C) 10 sodas and 9 DVDs D) 10 sodas and 10 DVDs E) It is impossible to determine the market basket without information on the quantity of at least one of the two goods consumed.