If an individual has a constant MRS of shoes for sneakers of 3/4 (that is, he or she is always willing to give up 3 pairs of sneakers to get 4 pairs of shoes) then, if sneakers and shoes are equally costly, he or she will
a. buy only sneakers.
b. buy only shoes.
c. spend his or her income equally on sneakers and shoes.
d. wear sneakers only 3/4 of the time.
a
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A production indifference curve shows all combinations of input quantities capable of producing a given quantity of output.
Answer the following statement true (T) or false (F)
Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00 . This implies that a 20 percent increase in the price of hot dogs will cause the quantity of mustard purchased to
a. fall by 200 percent. b. fall by 40 percent. c. rise by 200 percent. d. rise by 40 percent.
Since World War II, the business cycle has been characterized by
A. Alternating periods of expansion and contraction. B. Shorter periods of growth. C. Increasingly longer recessions. D. Steady, continued growth.
The GDP price index one year was 200, and the next year it was 215. What was the percentage change in the price level (inflation) from one year based on that index?
a. 7.5% b. 10% c. 15% d. 2%