Larry consumes at a point on his budget line where his marginal rate of substitution is less than the magnitude of the slope of his budget line. As Larry moves toward his consumer equilibrium point, he will move to a
A) lower budget line.
B) higher budget line.
C) lower indifference curve.
D) higher indifference curve.
D
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If automobiles and gasoline are complements, then their cross-elasticity coefficient will be:
a. strictly greater than one. b. positive. c. equal to zero. d. negative.
When the relative price of a good decreases, consumers respond by buying
a. a larger quantity of that good and a larger quantity of substitutes for that good. b. a larger quantity of that good and a smaller quantity of substitutes for that good. c. a smaller quantity of that good and a larger quantity of substitutes for that good. d. a smaller quantity of that good and a smaller quantity of substitutes for that good.
Suppose you bought a concert ticket from Ticketmaster for $50, but when you get to the concert, there are a large number of people waiting outside who offer to pay you more than $50 for your ticket. What is probably true?
A. There is an excess supply of tickets at the Ticketmaster price. B. There is an excess demand for tickets at the Ticketmaster price. C. The Ticketmaster price is the equilibrium price. D. The Ticketmaster price was above the equilibrium price.
Assume that the market for cage-free eggs is perfectly competitive. All else equal, as farmers find it less profitable to produce and sell cage-free eggs in this market
A) the demand curve will shift to the left and the equilibrium price will decrease. B) the supply curve will shift to the left and the equilibrium price will increase. C) the supply curve will shift to the right, the demand curve will shift to the left, and the equilibrium price will decrease. D) the supply curve will shift to the left, the demand curve will shift to the left, and the equilibrium price will increase.