The above table shows Tammy's total utility from videos and CDs. If Tammy has $70 to spend on videos and CDs and if the price of a video is $10 and the price of a CD is $20, then Tammy maximizes her utility by purchasing
A) 3 CDs and 1 video.
B) 1 CD and 5 videos.
C) 2 CDs and 3 videos.
D) none of the above
C
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A horizontal line showing the current rate of inflation, as determined by past expectations and pricing decisions is called the:
A. short-run aggregate supply line. B. short-run equilibrium output line. C. aggregate demand curve. D. long-run aggregate supply line.
Collusion makes firms better off because if they act as a single entity (a cartel) they can reduce output and increase their prices and profits. But some cartels have failed and others are unstable
Which of the following is a reason why cartels often break down? A) Most cartels do not have a dominant strategy. B) Each member of a cartel has an incentive to "cheat" on the collusive agreement by producing more than its share when everyone else sticks with the collusive agreement. C) Members of a cartel may resent having to share their profits equally. D) When a cartel is profitable the amount of competition it faces increases.
The intersection between the long-run aggregate supply and aggregate demand curves determines the: a. level of full-employment real GDP. b. level of prices (CPI)
c. money supply. d. marginal product. e. both a and b.
A college has found that during every home football game, a group of students sits on a hillside next to the stadium and watches the game without purchasing tickets. In economics, the problem that this college is facing is referred to as a
a. common good problem. b. free rider problem. c. onlooker problem. d. deadweight loss problem.