Jon spends all of his income on energy drinks (E) regardless of the price and his income. Derive Jon's demand equation for energy drinks, E*(p,Y)
What will be an ideal response?
E* = Y/p
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The actual unemployment rate exceeds the natural rate of unemployment. What are policymakers concerned about in this situation?
What will be an ideal response?
Assume that initially country A exchanges three barrels of oil for one ton of steel from country B. Later the arrangement changes to four barrels of oil for one ton of steel. This indicates that:
a. the terms of trade for country B have improved. b. country A has a comparative advantage in the production of steel. c. the relative price of steel in terms of oil has fallen. d. the terms of trade for country A have improved. e. country B has an absolute advantage in the production of oil.
Marginal utility can be:
A) positive, but not negative B) positive or negative, but not zero. C) positive, negative, or zero. D) decreasing, but not negative.
Suppose that nuclear power plants are banned. What are examples of the opportunity costs of this decision?
What will be an ideal response?