Refer to the information provided in Figure 3.13 below to answer the question(s) that follow.
Figure 3.13Refer to Figure 3.13. Assume hamburgers are a normal good. A decrease in income will cause a movement from
A. D2 to D1.
B. Point G to Point F.
C. S2 to S1.
D. Point A to Point B.
Answer: A
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Suppose the United States' production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis. We now learn that the German mark sharply depreciates against the U.S. dollar. We now know that
A) the United States has no comparative advantage B) Germany has a comparative advantage in butter. C) the United States has a comparative advantage in butter. D) Germany has a comparative advantage in widgets. E) Germany has lost its comparative advantage.
Which of the following is a derivative financial asset?
A) A mortgage B) Commercial paper C) A Treasury bill D) A financial futures contract
A national chain of bookstores has initiated a frequent buyer program. If you buy a frequent buyer card for $10, you are entitled to a 10 percent discount on all purchases for 1 year. This practice is an example of:
A) peak-load pricing. B) intertemporal price discrimination. C) two-part tariff. D) bundling. E) Both A and B are correct.
When the consumption of a good generates an external benefit:
a. the private benefit consumers receive from the good will be higher than the true social benefit. b. too much of the good will tend to be produced from the viewpoint of economic efficiency. c. the community generally suffers an exactly offsetting external cost from the production of the good. d. the market demand curve will understate the total benefits derived from consumption of the good, and as a result, too little of it will be produced and consumed.