Jackie notices everyone wearing Converse sneakers on the first day of school. Ever the fashionista, this will likely affect:
A. the prices of related goods, since other shoes will be less popular and cost less now.
B. Jackie's preferences for shoes, since she feels as though she needs them now.
C. Jackie's expectations of future prices, since the price of Converse will likely go up because they're getting so popular.
D. Jackie's income, as she now needs to buy Converse and will have less to spend on other goods.
Answer: B
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Refer to the graph below. Assume the consumer has an income of $100, the price of X is $2 and the price of Y is $1. According to the graph, the income effect of a decrease in the price of X from $2 to $1 is equal to: 
A. 20 B. 5 C. 25 D. 30
In order for the compensating differential associated with a risky job to be negative (so that a risky job pays less than a nonrisky job), it must be that
A. most workers prefer the risky job to the safe job when both wages are equal. B. many workers are willing to work the risky job for free. C. the government mandates that the wages in the two sectors be equal. D. there is great demand for labor in both sectors. E. the number of risky jobs is less than the number of workers who prefer the risky job.
The next question is based on the demand and cost data for a pure monopoly given in the table below.OutputPriceTotal Cost0$500$25013002602250290320035041505005100680If the pure monopoly were forced to produce the allocatively efficient level of output through the imposition of a price ceiling, the price would have to be set at ________.
A. $150 B. $200 C. $250 D. $100
Refer to the diagram. Economies of scale:
A. are evident over the entire range of output.
B. develop over the 0Q 1 range of output.
C. begin at output Q 3 .
D. occur only over the Q 1 Q 3 range of output.