The price of an airline ticket rises as the amount of time between purchase and flight departure gets smaller. The airlines base the policy on the assumption that
a. consumers are not aware of airline prices.
b. consumer demand is unrelated to prices.
c. consumer demand becomes more elastic as departure time approaches.
d. consumer demand becomes less elastic as departure time approaches.
d
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In 2009, Samoa changed from everyone driving on the right side of the road to everyone driving on the left side of the road. Although everyone agreed that it was important to drive on the same side of the road, some Samoans were not happy about the change. This created a disagreement about which Nash equilibrium was the best equilibrium, and therefore represented
A) an assurance game. B) a pure coordination game. C) a battle of the sexes game. D) a prisoner's dilemma game.
In calculating accounting profit, accountants typically don't include
a. long-run costs. b. sunk costs. c. explicit costs of production. d. opportunity costs that do not involve an outflow of money.
When PAE < Y the economic response should be:
A. there will be no change in aggregate production. B. eventually production will increase. C. eventually production will decrease. D. the government will intervene by cutting down on taxes.
The price of hamburgers is $2 and the price of brownies is $4. The consumer has $14 of income. The consumer is purchasing 3 hamburgers and receiving 30 utils for the last hamburger. He is also purchasing 2 brownies and receiving 40 utils for the last
brownie. This set of goods A) is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good. B) is an optimum since the entire income is spent and total utility is maximized. C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers than for brownies. D) is not an optimum because the consumer has not spent all of his money.