Refer to the above table If the price of a movie download is $2 and the price of an apple pie is $5 and the consumer has $40, the rational consumer will purchase
A. 6 movies and 6 apple pies.
B. 2 movies and 3 apple pies.
C. 2 movies and 2 apple pies.
D. 5 movies and 6 apple pies.
Answer: D
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Which of the following statements is true?
A) Optimization is an easy process, and all economic agents are perfect optimizers. B) Optimization implies choosing the best option from a set of alternatives. C) It is easier for a person to optimize when he has less information. D) People always successfully optimize given the limited information they have.
If price decreases by 10 percent and quantity demanded increases by 30 percent, the price elasticity of demand will be
A) 0.333. B) 3. C) 30. D) 300.
Use the above figure. The AVC at output 10 is
A. $1.00. B. $2.00. C. $20.00. D. $3.00.
A mainstream criticism of the rational expectations theory is that:
A. The theorists confuse correlation with causation in interpreting the empirical evidence B. People do not make consistent forecasting errors which can be exploited by policy makers C. Many markets are not purely competitive and do not adjust rapidly to changing market conditions D. The data indicate that economic policy does not affect real GDP and employment