People view alcohol and marijuana as perfect substitutes. This means that
A) individuals will consume either alcohol or marijuana, but not both, regardless of price.
B) as the price of alcohol decreases, marijuana use decreases.
C) the marginal utility for alcohol and marijuana is constant.
D) Both B and C.
D
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An upward sloping isoquant
A) can be derived from a production function with one input B) can be derived from a production function that uses more than one input where reductions in the use of any input always reduces output C) cannot be derived from a production function when a firm is assumed to maximize profits D) can be derived whenever one input to production is available at zero cost to the firm E) none of the above
Consumers with higher wages have ________ opportunity costs than consumers with low wages, which means that managers should place stores ________ in areas that are frequented by high-income consumers.
A) lower; farther apart B) lower; closer together C) greater; closer together D) greater; farther apart
Which of the following examples illustrates a proportional income tax?
a. I earn $5,000 and pay $500 in taxes; you earn $10,000 and pay $1,000 in taxes. b. I earn $5,000 and pay $500 in taxes; you earn $10,000 and pay $500 in taxes. c. I earn $5,000 and pay $500 in taxes; you earn $10,000 and pay $800 in taxes. d. I earn $5,000 and pay $500 in taxes; you earn $10,000 and pay $1,200 in taxes.
A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom. A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom. What is the likely explanation for the difference in wages?
a. U.S. textile workers belong to a union, whereas Vietnamese textile workers do not belong to a union. b. There is little demand for cotton cloth in Vietnam and great demand in the U.S. c. Labor is more productive making cotton cloth with a mechanical loom than with a hand loom. d. Vietnam has a low-wage policy to make its textile industry more competitive in world markets.