Suppose the price of pizza falls to $1 per slice. Assuming that Tom's preferences continue to be those shown in the above table, and assuming that MU/P = 3 is still the point at which his consumer optimum is reached, how many slices will Tom now buy?
A. 1 slice
B. 2 slices
C. 3 slices
D. 4 slices
Answer: D
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The RBC model tells us that
A) as the real wage rate rises, the amount of labor supplied and thus output produced falls. B) as the price level rises, the real wage rises, thus raising the amounts of labor supplied and output produced. C) as the real interest rate rises, the amount of labor supplied and thus output produced rises. D) as the price level rises above the expected price level, actual output rises above the natural real GDP.
When firms use cost-plus pricing in a market,
a. each firm determines its price based on other firms' costs and prices. b. it may appear as though firms are colluding in price when they actually are not. c. prices of different firms diverge widely. d. each firm falls short of maximizing profit as they charge the same price irrespective of their costs. e. each firm sells only to its most-favored customer.
You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for
a. granite countertops to shift to the left. b. granite countertops to shift to the right. c. substitute products such as marble countertops to shift to the right. d. substitute products such as marble countertops to be unaffected by buyers' preferences for granite.
In Figure 32.1, at the supported price-quantity combination where production is unlimited, and government buys the excess, the value to consumers is 
A. 0P*CQ*. B. 0HCQ*. C. 0ABQD. D. 0PfloorBQD.