Suppose a consumer has preferences over two goods, X and Y, which are perfect substitutes. In particular, two units of X is equivalent to one unit of Y. If the price of X is $1, the price of Y is $3, and the consumer has $30 of income to allocate to these two goods, how much of each good should the consumer purchase to maximize satisfaction?
a. 30 units of X and 0 units of Y
b. 0 units of X and 10 units of Y
c. 15 units of X and 5 units of Y
d. 15 units of X and 0 units of Y
a
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To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Referring to the above figure, the area that equals the tax revenue the government raises from this tax on sports equipment is
A) P1P3ed. B) ecd. C) P0P2ca. D) P1P2cb.
At present, the Social Security System
A) takes in more revenue than it spends on benefits. B) takes in less revenue than it spends on benefits. C) equates the revenue that it receives and the amount it spends on benefits. D) has no idea of just how much revenue it taking in.
The Gauss-Markov theorem for multiple regression states that the OLS estimator
A) has the smallest variance possible for any linear estimator. B) is BLUE if the Gauss-Markov conditions for multiple regression hold. C) is identical to the maximum likelihood estimator. D) is the most commonly used estimator.
Carl is considering attending a concert with a ticket price of $35 . He estimates that the cost of driving to the concert and parking there will total an additional $20 . In order to attend the concert, Carl will have to take time off from his part-time job or forgo studying for an exam scheduled for the next morning. He estimates that he will lose 5 hours at work, at a wage of $6 per hour, or 5
hours of study time. If Carl considers studying the best alternative use of his time, his opportunity cost of attending the concert equals a. $55 b. $55 plus the value of the higher exam grade he could earn by studying for 5 hours c. $85 plus the value of the higher exam grade he could earn by studying for 5 hours d. $85 minus the value of the higher exam grade he could earn by studying for 5 hours e. $55 minus the value of the higher exam grade he could earn by studying for 5 hours