Refer to the table above. The opportunity cost per dollar of value added in stitching shoes by workers in Laborland is ________
A) $0.25 B) $0.50 C) $2 D) $4
C
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For years, your neighbor insisted she had no desire to own a computer. Recently, however, she purchased one and says she did so because all her relatives have computers and she wants to exchange e-mail with them. Your neighbor's behavior is an example of
A) a switching cost. B) the impact of negative market feedback. C) limited-pricing behavior. D) a network effect.
Policy makers often use taxes and subsidies to address market failure in medical care. A good example of this policy is the tax exemption to encourage employers to offer insurance to their workers. Which statement is true about this tax policy?
a. The policy encourages employees to purchase the amount of insurance they would choose to buy without the incentive. b. The policy has resulted in employees demanding more than the optimal level of insurance coverage. c. The policy has led to the market providing the optimal level of medical care. d. The policy provides conclusive evidence that government action improves market outcomes. e. The policy had little effect on the expansion of employer-sponsored insurance.
Use the following table to answer the question below. Cloe is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from the consumption of each product are as shown in the following tableNumber of ItemsMarginal Utility of ChocolatesMarginal Utility of Hard Candies160150250140340120430100520806107075508020Based on taste and preference alone, which good does Cloe prefer?
A. One cannot tell from the given data. B. chocolates C. hard candies D. Cloe equally likes chocolates and hard candies.
An overvalued currency can be maintained:
A. even in the face of prolonged speculative attacks. B. only until international reserves are exhausted. C. indefinitely. D. as long as the government is willing to defend the currency.