The price of one good changes and Sue is now at a point on her indifference curve where the marginal rate of substitution exceeds the relative price. Sue will now choose to buy ________ of the good that is measured on the ________
A) more; x-axis
B) more; y-axis
C) the same quantity; x-axis
D) less; x-axis
A
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Suppose there are only two goods: food and clothing. What does it mean for the U.S. to have a comparative advantage in food production?
a. The U.S. needs fewer resources to grow a given amount of food than do other nations. b. The U.S. sacrifices less clothing production to grow a given amount of food than do other nations. c. In the U.S., food production needs fewer resources than does a comparable amount of clothing production. d. In the U.S., food production costs less than does clothing production.
The Cobb-Douglas production function for a beer manufacturer is q=1.52L0.6K0.4. Assume that the firm's capital is fixed at 250 units, the rental rate of capital is $5 per unit, and the wage rate is $10 per hour
The amount of labor needed to produce q units of output is A) 0.0124q. B) 13.832q0.6. C) 0.0124q1.67. D) 13.832q1.67.
A study of consumers in an area found that as family income increased from $25,000 per year to $35, 000 per year, other factors held constant, the number of houses purchased increased from 7,000 per year to 11,000 per year. This finding indicates an income elasticity of demand coefficient for housing over this family income range of:
a. 0.22. b. 0.75. c. 1.33. d. 4.50.
Suppose angioplasty (with stents) and coronary artery bypass graft (CABG) surgery are substitute treatment alternatives for coronary artery disease. What should happen to the equilibrium price and quantity of angioplasty procedures performed if a new CABG technique is introduced that is less invasive (requiring a 4-inch incision under the breast bone rather than cracking open the patient's rib cage) and requires one-third the recovery period of regular CABG surgery?
a. Price will decrease and quantity will increase. b. Both price and quantity will decrease. c. Both price and quantity will increase. d. There will be no effect on either the price or quantity of angioplasty procedures. e. Price will increase and quantity will decrease.