If increasingly more units of good Y must be given up as each successive unit of good X is produced, then the PPF for these two goods is
What will be an ideal response?
a downward-sloping curve that is bowed outward.
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Sandy is a big Star Wars fan and buys a $20 ticket a week in advance to the premier of the new movie. After arriving at the theater, she realizes she left the ticket at home and doesn't have time to return home and get it. Sandy can buy another ticket for $20. She decides not to because seeing the movie isn't worth $40 to her. This is an example of:
A. rational behavior because she values the movie less than $40 B. irrational behavior because she really values the movie more than $40 C. irrational behavior because the initial $20 is a sunk cost. D. rational behavior because it is a commitment device to never forget a ticket at home again.
Dane consumes both hamburgers and pizza. Suppose the formula for his indifference curves is H = U - 2 P, where H stands for the number of hamburgers, P stands for the number of pizzas, and U represents utility. Which of the following statements is true?
A. Dane prefers a consumption bundle with 5 hamburgers and 4 pizzas to a consumption bundle with 10 hamburgers and 2 pizzas. B. Dane prefers a consumption bundle with 8 hamburgers and 3 pizza to a consumption bundle with 14 hamburgers and 1 pizzas. C. Dane is indifferent between a consumption bundle with 10 hamburgers and 2 pizzas and a consumption bundle with 8 hamburgers and 3 pizzas. D. Dane is indifferent between a consumption bundle with 5 hamburgers and 4 pizzas and a consumption bundle with 8 hamburgers and 3 pizzas.
All of the following are good reasons for an applied econometrician to learn some econometric theory, with the exception of
A) turning your statistical software from a "black box" into a flexible toolkit from which you are able to select the right tool for a given job. B) understanding econometric theory lets you appreciate why these tools work and what assumptions are required for each tool to work properly. C) learning how to invert a 4×4 matrix by hand. D) helping you recognize when a tool will not work well in an application and when it is time for you to look for a different econometric approach.
A monopolist faces a horizontal demand curve while a perfect competitor faces a downward sloping demand curve for their respective products
Indicate whether the statement is true or false