When a slice of pizza at the student union sold for $2, Moe did not purchase any. When the price fell to $1.75, Moe purchased a slice each day for lunch. Thus, we can infer that Moe's reservation price for a slice of pizza is:
A. exactly $2.00.
B. at least $1.75 but less than $2.
C. less than $1.75.
D. exactly $1.75.
Answer: B
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A movement along the demand curve for a good can be attributed to a change in
a.the substitution effect of consuming a good
b.the demand for a good
c.the opportunity cost of producing a good.
d.the quantity demanded of a good
The people of the Island of Yap used stones as a general medium of exchange. Therefore,
A) their economic system was based upon barter. B) their stones served as money. C) they had no price system, because prices can't be measured with stones. D) inflation was impossible.
The fact that indifference curves are bowed in toward the origin
A) is not true. B) follows from the fact that more is preferred to less. C) follows from the property that the consumer likes diversity in his or her consumption bundle. D) follows from the property that consumption and leisure are normal goods.
The stage of industrial development during the early part of the 20th century is usually referred to as Fordism. The characteristics of this system include all of the following except
(a) Moving assembly-line production (b) Mass production of relatively inexpensive consumer goods (c) The extensive use of skilled labor to produce complex consumer goods (d) Consumer durable goods purchased on installment credit