The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. If the price is increased to $40, then one would expect sales to equal:
a. 20 units.
b. 10 units.
c. 5 units.
d. 0 units.
Ans: c. 5 units.
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Use the following graph for a competitive market to answer the question below.
A black market where the price is $2.00 could result from a price
A. ceiling set at $2.50. B. floor set at $2.00. C. floor set at $1.50. D. ceiling set at $1.50.
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B would be using resources efficiently if they were producing:
A. (200 iPods, 1,750 tablets). B. (200 iPods, 1,500 tablets). C. (200 iPods, 1,000 tablets). D. (200 iPods, 750 tablets).
From an economic standpoint, the most relevant tax approach to reducing carbon dioxide emissions is a
a. gasoline tax c. carbon tax b. BTU tax d. all of the above
Ron and Leslie are deciding what to do to clean up the park.
Ron and Leslie are deciding what to do to clean up the park. They can either fill the bird feeders or clean the lake. In order to clean the lake they must work together neither one can clean it alone. The payoff is the utility they derive from completing a task (a higher number is better).
What is Leslie's best response if Ron fills the bird feeder?
What is Leslie's best response if Ron cleans the lake?
What is Ron's best response if Leslie fills the bird feeder?
What is Ron's best response if Leslie cleans the lake?
What is the Nash equilibrium?
True/False. Leslie is playing a dominant strategy.