Sam decides to buy a $75 ticket to a particular New York professional hockey game rather than a $50 ticket for a particular Broadway play. We can conclude that Sam:
A) is relatively unappreciative of the arts.
B) obtains more marginal utility from the play than from the hockey game.
C) has a higher "marginal utility to price ratio" for the hockey game than for the play.
D) has recently attended several other Broadway plays.
Ans: C) has a higher "marginal utility to price ratio" for the hockey game than for the play.
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In the short run, the fixed costs of a firm:
A. must be paid regardless of level of output. B. should be strongly considered in deciding whether to shut down production. C. are zero when quantity produced is zero. D. must be higher than variable costs for the firm.
The spending multiplier equals 1/marginal propensity to save if an economy:
a. has a trade surplus. b. is open to international trade. c. does not trade with any other country. d. has a higher level of saving than consumption. e. reduces its investment expenditures to zero.
The greater the magnitude of the external benefits of production, a. The larger is the deadweight loss from overproduction
b. The greater would be the optimal tax. c. The less the private market solution would deviate from the socially efficient level of output. d. All of the above are true.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected. B. only the long-run aggregate supply curve would shift left. C. only the short-run aggregate supply curve would shift left. D. the long-run and short-run aggregate supply curves would both shift left.