Assume that a college student spends her income on mac-n-cheese and CDs. The price of one box of mac-n-cheese is $1, and the price of one CD is $12 . If she has $200 of income, she could choose to consume
a. 30 boxes of mac-n-cheese and 12 CDs.
b. 40 boxes of mac-n-cheese and 14 CDs.
c. 20 boxes of mac-n-cheese and 16 CDs.
d. 60 boxes of mac-n-cheese and 12 CDs.
a
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If a monopolist is producing the quantity at which marginal revenue equals marginal cost, it should
A) continue to produce this amount if it wants to maximize profits. B) reduce output if it wants to maximize profits. C) increase price and keep output unchanged if it wants to maximize profits. D) increase output if it wants to maximize profits.
The income effect occurs when an individual switches to another similar good when the price of the preferred good increases
a. True b. False Indicate whether the statement is true or false
When practicing price discrimination, a firm can increase its revenue by:
a. charging a higher price to the customers with a more inelastic demand. b. charging a higher price to the customers with a perfectly elastic demand. c. supplying more in a market with a more inelastic demand. d. supplying less in a market with lower elasticity of demand. e. charging a lower price in a market dominated by wealthy consumers.
An increase in the public debt will:
A. decrease the U.S. debt held by citizens and institutions in foreign nations. B. decrease the potential for higher taxation in the United States. C. increase the inequality in the distribution of income. D. increase incentives to work and bear risk.