Kristen has an income of $450 per year to spend on music CDs and movies on DVDs. The price of a CD is $15 and the price of a DVD is $22.50. The indifference curves in the figure above (I1, I2, and I3 ) reflect Kristen's preferences
What is Kristen's best affordable combination of DVDs and CDs? A) 10 DVDs and 15 CDs per year
B) 15 DVDs and 12 CDs per year
C) 12.5 DVDs and 12 CDs per year
D) 5 DVDs and 18 CDs per year
A
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Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates the
A. demand for oranges will necessarily rise. B. price of oranges will fall. C. equilibrium quantity of oranges will rise. D. supply of oranges has declined.
Technological change can increase the demand for loanable funds because it
A) decreases the need for additional equipment. B) increases people's expected future disposable income. C) lowers the interest rate. D) has little effect on production cost. E) can increase the expected profit.
The adverse selection problem in international investment means
A) that those seeking funds for the riskiest projects are those most actively seeking the funds. B) that the recipients of the funds may use the funds for other than the approved projects. C) that government officials may demand higher than the usual amount of bribes. D) those in the highest levels of government are the most dishonest.
Which of the following is an example of nonprice competition?
a. giving coupons for 10 percent discounts to potential customers b. having a Memorial Day Sale c. lowering the price on several selected brands d. offering a product in three colors-blue, green, and red-in addition to the standard black e. increasing the price on all products