Suppose that for Merv the marginal utility of $50-per-serving caviar is 100 and the marginal utility of $1-per-serving popcorn is 10 . For his snack, Merv should buy:
a. the caviar if he has the $50; otherwise, the popcorn.
b. the caviar if he has the $50; otherwise, nothing.
c. the popcorn, whether he has the $50 or not.
d. one serving each of the caviar and popcorn, if he has $51.
e. five servings of popcorn for each serving of caviar.
c
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To determine who bears the greater share of a tax, we compare the
A) number of buyers to the number of sellers. B) elasticity of supply to the elasticity of demand. C) size of the tax to the price of the good. D) government tax revenue to the revenue collected by the suppliers. E) pre-tax quantity to the post-tax quantity.
When the labor market is at full employment
A) real GDP equals potential GDP. B) the price level is stable. C) the price level equals the potential price level. D) the short run aggregate supply curve is horizontal.
Bureaucratic capture occurs when:
A. lobbyist groups become so powerful that they essentially have a stranglehold on policymakers. B. professionals from one particular industry hold the majority of positions in one particular government office. C. industries become halted in their ability to continue operating due to over-regulation of the market. D. government positions are filled by people with close ties to the group they are supposed to regulate
Which of the following best illustrates moral hazard?
a. After a person obtains life insurance, she takes up skydiving. b. A person obtains insurance knowing he is in poor health. c. A person holds stock only in very risky corporations. d. A person holds stocks from only a few corporations.