Use the following statements to answer the question:
I. Consider the problem of negotiating the price of a rug that costs $100 to make. If there are two buyers (one with a maximum willingness-to-pay of $200 and one with a maximum willingness-to-pay of $250 ), then the situation is no longer a constant sum game.
II. The likely outcome from the game described in statement I is that the second buyer will bid a price slightly above $200 (e.g., $201 ) to win the rug.
A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.
C
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The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. There is no external benefit nor external cost. The demand curve for chocolate is the same as the
A) marginal social cost curve of chocolate. B) marginal social benefit curve of chocolate. C) opportunity cost curve of chocolate. D) marginal social benefit curve minus the marginal social cost curve of chocolate.
In the above figure, at a price of $8, a perfectly competitive firm produces ________ and it ________
A) 0; incurs an economic loss B) 0; makes zero economic profit C) some output; makes zero economic profit D) some output; makes an economic profit
While in college, Marty and Laura each buy 15 bus tickets per month. After they graduate and have full-time jobs, Marty buys 0 bus tickets per month and Laura buys 28 bus tickets per month. Comparing income elasticity of demand for bus tickets, Marty's
a. is negative, and Laura's is positive. b. is positive, and Laura's is negative. c. is zero, and Laura's is positive. d. is zero, and Laura's is negative.
Which of the following could produce the result indicated by the arrow in the Actual & Potential GDP graph? Check all that apply.
a. An increase in Consumer Spending
b. A decrease in Government Spending
c. An Increase in Taxes
d. A decrease in the money supply
e. An increase in Investment Spending
f. A decrease in Consumer Spending