If a consumer concludes that the marginal utility of the last dollar spent on vegetables exceeds the marginal utility of the last dollar spent on junk food, he will respond by
A) consuming relatively more junk food and fewer vegetables.
B) consuming relatively more vegetables and less junk food.
C) consuming equal amounts of vegetables and junk food.
D) halting consumption of junk food altogether.
Answer: B
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An important determinant of the amount of grains harvested next year by Ethiopian farmers is the amount of seeds planted this year
Given that Western nations have guaranteed to donate five hundred tons of grain next year, this year the Ethiopian farmers will: A) plant more seeds as the food aid establishes a minimum price for grain. B) plant more seeds as the farmers' confidence is restored. C) plant the same amount of seeds as they would have without the food aid. D) plant fewer seeds as consumers demand for grain is completely price elastic. E) plant fewer seeds as the price of grain will be lower with the food aid.
Refer to the above figure. The firm's short-run shutdown price is
A) at $1. B) at $2. C) at $4. D) above $4.
Accountants calculate __________ differently than do economists: a. Total revenue
b. Total costs. c. Profits. d. Both total costs and profits.
In the short run, the supply of a resource will generally be
a. less elastic than in the long run. b. more elastic than in the long run. c. equally elastic as the supply of the resource in the long run. d. inversely related to the elasticity of demand for the product that the resource helps produce.