Suppose that if the price of plane tickets increased, more people would choose to travel by train. If this happened, you would know that:
A. the cross-price elasticity between plane tickets and train tickets is negative.
B. plane tickets are an inferior good.
C. the cross-price elasticity between plane tickets and train tickets is positive.
D. plane tickets and train tickets are complements.
Answer: C
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In regards to monopolistic competition, some economists argue that consumers are willing to pay a higher price in order to enjoy a wider selection of goods and services
a. True b. False
The spending multiplier is defined as:
a. the ratio of the change in equilibrium real GDP to the initial change in spending. b. the change in initial spending divided by the change in personal income. c. 1 / (marginal propensity to consume). d. 1 / (1 ? marginal propensity to save).
Use the above table. If the marginal revenue product is $30, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?
A. 1; $10 B. 2; $15 C. 4; $25 D. 3; $20
The socially optimal amount of pollution moderation occurs where society's marginal:
A) bene?t of moderation exceeds its marginal cost of moderation by the greatest amount. B) bene?t of moderation equals its marginal cost of moderation. C) cost of moderation is at its maximum. D) bene?t of moderation is zero.