For a constrained minimization problem, the decision maker
A. is constrained by the choice set of values for the activities.
B. seeks to minimize the cost of achieving a specific goal.
C. is constrained by the specific amount of total benefits.
D. all of the above
E. none of the above
Answer: D
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At a competitive market equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities, i. consumer surplus is minimized. ii. marginal cost equals marginal benefit. iii. resources are efficiently used
iv. producer surplus is minimized. A) ii and iii B) i and ii C) i and iv D) i, ii, iii, and iv E) ii only
In a study of whether prices are sticky or not, Alan Blinder supervised interviews of corporate executives on the frequency with which their firms change prices and found that
a. 55 percent of firms changed prices only once a year or less. b. over 20 percent of the firms changed prices more than 12 times per year. c. 10 percent of companies changed prices 4 to 12 times per year. d. there is not a considerable departure from auction-market behavior.
Which of the following is concerned with the distribution part of resource allocation?
a. An economy decides to produce equal quantities wheat, rice, and clothes. b. An economy decides to use 25% of the available capital for producing clothes. c. An economy decides to ration 40% of its output to low income groups. d. An economy decides to use more labor for producing wheat and rice.
Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X, ceteris paribus.Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of combsOpportunity Cost(Foregone brushes)Number of brushesOpportunity Cost (Foregone combs)J4 0NAK3 10 L2 17 M1 21 N0NA23 On the basis of Table 1.3, the law of increasing opportunity costs applies to
A. Both brushes and combs. B. Brushes but not combs. C. Combs but not brushes. D. Neither brushes nor combs.