Steve likes to buy comics and games every month. He recently got a pay raise, so he has $20 more to spend each month. If comic books are inferior goods and games are normal goods, then Steve will buy:
a. more comics and games
b. more comic books but may buy the same or a smaller quantity of games
c. more games but may buy the same or a smaller quantity of comics.
d. the same amounts of games and comics.
c
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The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF0 . At which of the following production points would the economy grow most rapidly?
A) Point A B) Point B C) Point C D) It makes no difference among the three points because they are all production efficient. E) More information is needed to answer the question.
Absent any violations of the conditions underlying the first welfare theorem, the competitive market equilibrium is efficient if and only if tastes are quasilinear.
Answer the following statement true (T) or false (F)
A free rider problem is created by private goods
Indicate whether the statement is true or false
Which of the following is an example of a change in culture affecting the production of a good or service:
A. A shortage of chocolate chips causes a cookie company to stop production. B. Laws banning smoking in restaurants result in a decrease in demand for cigarettes. C. An oil spill in the ocean causes local seafood restaurants to lose business. D. The "green movement" leads to an increase in demand for recycled products.