JoAnn considers cola and plain sparkling water to be good substitutes. Suppose the price of sugar, a key ingredient used to produce cola, falls. According to the substitution effect, which of the following is most likely to occur?
a. JoAnn will purchase less cola and more sparkling water.
b. JoAnn will purchase more cola and less sparkling water.
c. JoAnn will purchase more of all goods due to her higher real income.
d. JoAnn's demand curve will decrease (shift in), causing her to purchase less cola.
b
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Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.1 shows how much of each good Jesse and April can paint in one hour. April's opportunity cost of painting one snowboard is painting
A) 1.5 kites. B) 3 kites. C) 4 kites. D) 12 kites.
Jill, a bookkeeper, just received an attractive offer from an outside firm and so she asks for a raise from her current employer. She would be in a strong bargaining position because
a. Her value for disagreement has increased b. Her value for disagreement has decreased c. Her value for disagreement has not changed d. Her value for agreement has not changed
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point B to Point A is
A. -2/3. B. -3/4. C. -1.5. D. -20.
Suppose there was a debate regarding intelligence budgets and the Democrat was arguing for a budget increase from $40 billion to $41 billion and the Republican was arguing for the budget to increase to $45 billion. Further, suppose intelligence salaries and procurement of the same spy systems are project to rise 5%. The Republican accuses the Democrat of proposing a cut to intelligence gathering which, the Democrat insists his plan increases that spending. What is going on here?
A. The Republican is cutting only if you use baseline budgeting. B. Both are proposing cuts. They are both lying, regardless of budgeting technique. C. The Democrat is cutting only if you use current services budgeting. D. Both are proposing increases. The Republican is lying, regardless of budgeting technique.