When Williams-Sonoma introduced its first bread baker at $200, sales were low. But when it decided to offer a fancier $300 version, sales of the $200 bread baker rose tremendously. An economist concluded that consumers needed another bread baker for comparison to decide whether the $200 bread baker was a deal. This economist is likely to be a(n):
A. behavioral economist.
B. traditional economist.
C. engineering economist.
D. irrational economist.
Answer: A
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If the value of the marginal product of physical capital is $10 and the marginal product of physical capital is 5 units, the price of the finished good that the capital is used to produce is:
A) $1. B) $2. C) $5. D) $10.
During the colonial period, the English permitted both silver and gold to move freely in and out of the colonies
Indicate whether the statement is true or false
Sheri is currently purchasing 10 units of a normal good and her indifference curves exhibit diminishing marginal rate of substitution. Suppose there is a decrease in the market price of this good. Then
A) both her utility and her consumer surplus will increase. B) her consumer surplus will increase, but her utility will remain the same. C) her utility will increase, but her consumer surplus will remain the same. D) her consumer surplus will increase, but the change in her utility is unknown without more information.
Of the following, which is the least likely to be an example of substitute goods?
A) beer and pretzels B) margarine and butter C) beef and chicken D) tea and coffee