Ricardo buys cola and popcorn. Cola sells for $0.50 a can and popcorn sells for $1 per bag. He is in consumer equilibrium. The price of a cola jumps to $1 per can. In his new consumer equilibrium, Ricardo's
A) marginal utility of cola will be equal to his marginal utility of popcorn.
B) marginal utility per dollar spent will be 2.
C) total utility will be higher.
D) marginal utility of cola will decrease.
A
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Answer the following statements true (T) or false (F)
1. In imperfect product competition, the output price is fixed to the firm. 2. The demand curve for labor is more inelastic under competitive conditions than under imperfect competition. 3. The backward-bending portion of the labor supply curve shows the income effect dominating the substitution effect. 4. Unions cause a lowering of wages in the unionized labor market. 5. Unions cause the wages to be lower in the non unionized labor market. 6. Increased licensing requirements reduce the supply of labor. 7. Unemployment rates in Japan are the highest compared to other developed countries.
Which of the following is true of a competitive market? a. The rules of supply and demand do not apply to it
b. Buyers and sellers have little market power. c. Each buyer's or seller's effect on market price is substantial. d. Few sellers offer similar products.
During the 1997-1998 Asian financial crisis, Thailand tried to defend its fixed exchange rate for the Thai baht and eventually ran out of foreign currency reserves
a. True b. False
In the early 1990s, European unemployment rose largely because of
A) reductions in stock prices. B) undervalued currencies. C) overvalued currencies. D) high inflation. E) none of the above