You can drive to campus, take a bus, or walk. Driving costs you $1/mile in gas and maintenance, the bus costs $1 for unlimited distance, and walking is free but involves a disutility equivalent to $1/mile. If you live 2 miles from campus, and are a rational decision maker, what is your reservation price for a bus ticket?
A. $1
B. $2
C. $4
D. $0
Answer: B
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An individual derives utility from consuming "all other goods," g, and clean air (measured by the reduction in particulate matter per m3), a, as measured by the utility function U(g,a) = g0.6a0.4
The price of consumer goods equals $20 and the price of clean air (abatement) equals $10. What is the slope of the Engel curve when income increases from $100 to $200? A) The slope is 25. B) The slope is -25. C) The slope is zero. D) The slope is infinite.
The total of individual payoffs in the grand coalition must be less than the value the coalition earns
Indicate whether the statement is true or false
Which of the following best describes what will happen to equilibrium if large numbers of people cancel cable television subscriptions in exchange for subscriptions to on-demand movies and televisions providers like Netflix and Hulu?
a. A change in tastes away from cable television causes a leftward shift in the demand curve, a decrease in the equilibrium quantity, and an increase in the equilibrium price. b. A change in tastes away from cable television causes a rightward shift in the demand curve, a decrease in the equilibrium quantity, and a decrease in the equilibrium price. c. A change in tastes away from cable television causes a leftward shift in the demand curve, an increase in the equilibrium quantity, and a decrease in the equilibrium price. d. A change in tastes away from cable television causes a rightward shift in the demand curve, a decrease in the equilibrium quantity, and a decrease in the equilibrium price.
Which statement is false?
A. Throughout the 1980s, the Soviet Union devoted most of its capital and talent to its military establishment rather than to market reform. B. In the late 1970s, China began reforms, which eventually transformed it to a more market-oriented economy. C. Russia has been more successful than China in becoming a market-oriented economy. D. None of these statements are false.