Suppose a cup of tea costs $0.60 and a scone costs $1.20. If Edith spends all of her income on these two goods, and at her current level of consumption, she receives a marginal utility of 6 utils from the last cup of tea she buys and a marginal utility of 24 utils from the last scone she buys, then Edith should:
A. buy more tea and fewer scones.
B. not change her consumption of tea and scones.
C. buy more tea and more scones.
D. buy less tea and more scones.
Answer: D
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The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, there is
A) a shortage of 3,000 units of rental housing. B) a shortage of 6,000 units of rental housing. C) a surplus of 3,000 units of rental housing. D) neither a shortage nor a surplus of rental housing.
While regressive taxes are considered inequitable, cigarette taxation is popular because _____
a. it is a sumptuary tax b. it mainly hurts tobacco farmers in a few Southern states c. in a lifetime sense it is a progressive tax d. people are inconsistent
Other things remaining the same, when a fall in the price of one good is followed by an increase in the demand for another good, both goods are said to be:
a. inferior goods. b. substitute goods. c. Giffen goods. d. public goods. e. complementary goods.
Generally, there is _____ relationship between the GDP of a country and the number of work-hours in the country
a. an indirect b. a fluctuating c. a constant d. no