If goods X and Y are complements, then the cross price elasticity of demand will be
A) elastic.
B) greater than zero but less than 1.
C) negative.
D) positive.
C
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An indifference curve shows
A) the relationship between prices and a household's budget. B) all possible prices and preferences for a good. C) combinations of goods among which a household is indifferent. D) budget lines among which a consumer is indifferent.
Signals solve the adverse selection problem
A) if the signal is an advertisement placed in the New York Times or other top-tier publication. B) only if the signal is viewed as credible. C) when the signal is expensive to produce. D) if the signaling firm is known to be a profit-maximizer.
Suppose that a firm operating in perfectly competitive market sells 200 units of output at a price of $3 each. Which of the following statements is correct? (i) Marginal revenue equals $3. (ii) Average revenue equals $600. (iii) Average revenue exceeds marginal revenue, but we don't know by how much
a. (i) only b. (iii) only c. (i) and (ii) only d. (i), (ii), and (iii)
Popeye cannot eat enough free spinach. With this information, we know that Popeye's:
A. marginal utility for spinach is falling. B. total utility for spinach is falling. C. marginal utility for spinach never falls. D. total utility for spinach is always rising.