Nick has $300 a month to spend on detailing his sports car or buying bottles of good wine. It costs $100 to have his car detailed and $50 for a bottle of wine. He currently buys four bottles of wine and has his car detailed once a month. If the price of detailing his car decreased to $75, Nick's budget constraint:
A. would shift straight outward, because he is relatively wealthier.
B. would rotate and change slope because relative prices have changed.
C. would shift straight inward because he is relatively wealthier.
D. One cannot determine what would happen without knowing Nick's marginal utility of each good.
B. would rotate and change slope because relative prices have changed.
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Which of the following is an instance of employer prejudice that leads to wage differential?
a. Employers attempting to hire workers based on their marginal productivities b. Employers attempting to hire only male workers c. Workers attempting to work for only certain organizations d. Producers purchasing raw materials from selective suppliers e. Workers ready to work for any employer in the labor market
The government of Economica announces that it will purchase its farmers' surplus of milk. From this announcement, you can infer that Economica has a
a. free market for milk. b. price ceiling above the equilibrium price for milk. c. price floor above the equilibrium price for milk. d. price floor below the equilibrium price for milk.
One way of addressing the associated market failure that generates both private costs and external costs is for this activity to be
A. subsidized. B. left alone. C. banned. D. taxed.
If the Fed purchases $100,000 in government bonds from a bank, then the
A) liabilities of the bank rise by $100,000. B) reserves of the bank fall by $100,000. C) assets of the bank rise by $100,000. D) reserves of the bank rise by $100,000.