If a consumer reallocates his or her spending away from Good B and towards Good A, then the consumer's total utility will increase if:
A. MUA/PA > 0 and MUB/PB > 0.
B. MUA/PA > MUB/PB.
C. MUA/PA < 0 and MUB/PB < 0.
D. MUA/PA < MUB/PB.
Answer: B
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Industries often lobby against the removal of regulations because
a. the regulations often enforce a de facto cartel agreement. b. their customers would be made worse off without government-proscribed standards. c. the largest firms could then dominate the industry. d. deregulation would cause higher entry prices for new firms.
A recent study has revealed that the consumption of coffee is injurious to health. This led to a sharp decline in coffee consumption worldwide. If coffee production accounts for 40% of Richland's GDP, this will lead to a(n)________
A) rise in Richland's inflation rate B) increase in the real interest rate in Richland C) rise in Richland's demand for labor D) fall in Richland's demand for labor
Based on the theory of comparative advantage, nations maximize their well being when they
A) create more jobs. B) allocate resources more efficiently. C) increase trade surpluses. D) increase exports.
Refer to the above figure. If the government requires the natural monopolist to charge the efficient price, it will charge price
A) P5 and sell Q1 units. B) P2 and sell Q1 units. C) P3 and sell Q3 units. D) P1 and sell Q4 units.