List prices on new cars do NOT change very often, so
A) the real price of cars is very inflexible.
B) the prices of new cars can only be flexible if there are changes in the cost of materials.
C) price flexibility is not an important feature in the auto market.
D) price flexibility shows up primarily through the negotiations between buyers and sellers.
Answer: D
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Regardless of which consumption bundle in her choice set a consumer chooses, she will spend all of her available income.
Answer the following statement true (T) or false (F)
The slope of an isoquant measures
A) the ratio of the marginal utility of the two inputs. B) the price ratio of the two inputs. C) the rate at which inputs can be substituted for each other keeping total output constant. D) the average product of labor.
Which of the following industries does not fit the natural monopoly model?
A. Natural gas B. Cable TV C. Electricity D. Fast food restaurants
The table below shows the marginal benefit and marginal cost of purchasing an additional unit of 3 different public goods. Marginal benefitMarginal costTotal spending on the public goodPublic good 1$20$20$1,500Public good 2$15$25$800Public good 3$10$5$700 The government is spending more than is socially optimal on:
A. public good 1. B. public good 1 and public good 2. C. public good 3. D. public good 2.