Mitchell's money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At bundle J, Mitchell's MRS is 2. Given these prices and income, what is Mitchell's equilibrium consumption of X?
A. X = 50
B. X > 50
C. X < 50
D. None of the statements is correct.
Answer: B
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Dan sells newspapers. Dan says that a 4 percent increase in the price of a newspaper will decrease the quantity of newspapers demanded by 8 percent. According to Dan, the demand for newspapers is ________
A) inelastic B) unit elastic C) perfectly elastic D) elastic
In a study of whether prices are sticky or not, Alan Blinder supervised interviews of corporate executives on the frequency with which their firms change prices and found that
a. 55 percent of firms changed prices only once a year or less. b. over 20 percent of the firms changed prices more than 12 times per year. c. 10 percent of companies changed prices 4 to 12 times per year. d. there is not a considerable departure from auction-market behavior.
The difference between the value of a good to sellers and its price is known as: a. consumer surplus. b. producer surplus. c. demand
d. supply.