Suppose you eat at a restaurant that serves clams at a fixed price and crab legs at a price that varies based on market conditions. Each week, the marginal utility you attach to an order of crab legs is 100, and the marginal utility of an order of clams is 50 . One week you have crab legs, but the next week you have clams. This means that
a. you are irrational
b. your tastes must have changed
c. the price of clams dropped below the price of crab legs
d. the price of crab legs increased
e. the price of crab legs must have increased to more than twice that of clams
E
You might also like to view...
In the figure above, when the market is unregulated and in equilibrium, marginal social cost ________ marginal benefit, and the quantity of chemical produced is ________
A) exceeds; above the efficient quantity B) exceeds; below the efficient quantity C) is below; above the efficient quantity D) is below; below the efficient quantity E) equals; efficient
The purpose of measuring the overall level of prices in the economy is to permit comparison between dollar figures from different times
a. True b. False Indicate whether the statement is true or false
Over the past several decades, U.S. firms have faced more competition from overseas firms. Does this have any impact on the market power of U.S. oligopoly firms?
A. Yes, competition from overseas firms can substantially limit domestic firms' market power. B. no, because the United States government has effectively blocked all imports that might compete with domestic firms in oligopoly industries C. There is no way to know. D. no, because domestic firms in oligopoly markets are always so dominant that overseas producers have little or no impact on those markets
A public transit company finds that when it reduces the price of a bus ticket, total revenues remain the same. One can conclude from this that:
a. the demand curve is horizontal, reflecting infinite price elasticity. b. the company sells the same number of bus tickets both before and after the price change. c. the demand curve for bus tickets must have shifted to the right. d. the firm is operating in a range of the demand curve that is unit elastic. e. the price should be lowered further so that a larger quantity can be sold.