When economists study the behavior of sellers, they are studying:
A) supply.
B) the role of government.
C) demand.
D) accounting.
Ans: A) supply.
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The production possibilities frontier shifts as
A) tastes and preferences change. B) the money supply grows or shrinks. C) technology changes. D) the unemployment rate changes.
Keesha consumes only milkshakes and burgers. At her consumer equilibrium, which of the following is TRUE when Keesha can buy any portion of a unit of a milkshake or burger?
A) The marginal utility per dollar from a milkshake will exceed the marginal utility per dollar from a burger if she likes burgers more than milkshakes. B) The marginal utility per dollar from a burger will exceed the marginal utility per dollar from a milkshake if she likes burgers more than milkshakes. C) The marginal utility per dollar will be the same for each good. D) The marginal utility will be the same for each good.
Economists refer to externalities as an example of market failure when:
a. markets do not consider social costs as part of overall costs. b. additional external costs are so high that the firm must shut down. c. private costs are the same as costs to society as a whole. d. citizens bring lawsuits to stop production that pollutes.
When a good is taxed, the deadweight loss is larger the more elastic are demand and supply
a. True b. False Indicate whether the statement is true or false