If Lisa spends her income on veggie burgers and pints of soy milk and the price of veggie burgers is three times the price of a pint of soy milk, then when Lisa maximizes her utility she will buy
A) both goods until the marginal utility of veggie burgers is three times the marginal utility of soy milk.
B) three times as many veggie burgers as pints of soy milk.
C) three times as many pints of soy milk as veggie burgers.
D) both goods until the marginal utility of a pint of soy milk is three times the marginal utility of veggie burgers.
Answer: A
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The opportunity cost of producing more of one good on a production possibilities frontier is
A) a dollar amount. B) a ratio of quantities. C) a ratio of prices. D) equal to the area inside the production possibilities frontier. E) a theoretical concept which cannot be measured.
Refer to the figure above. This is an example of a(n) ________
A) zero-sum game B) prisoners' dilemma C) extensive-form game D) payoff matrix
A worldwide hops (a flowers used in brewing) shortage made stouts, ales and other specialty microbrews more pricy in 2008. Gayle Goshie, a hops farmer, blames overproduction for hops' previously cheap place on the agricultural market
The glut pushed many hop farmers out business, which gradually helped hop prices recover. Suppose farming hops is a perfectly competitive market. Why would some hop farmers go out of business? A) because the price of hops was below the minimum of average fixed cost B) because the price of hops was lower than the minimum of average variable cost C) because the price of hops was higher than the minimum of average variable cost D) because the price of hops was lower than the minimum of average total cost
The table below describes the value added in the production of a gallon of gasoline by each stage of production. (The values are hypothetical.)
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