The principle that consumers and firms optimize
A) is not helpful because some economic agents may behave irrationally.
B) is helpful because it allows us to analyze how economic agents respond to changes in their environment.
C) only applies to perfectly competitive markets.
D) is helpful because it determines the available technology.
B
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As we move to higher indifference curves, compensated demand (or MWTP) curves shift to the right.
Answer the following statement true (T) or false (F)
Credit cards were introduced in 1959. In 2014, the U.S. credit card balance was $880 billion. Which of the following is TRUE?
A) The $880 billion balance is part of M2 but not part of M1. B) The $880 billion balance is part of both M1 and M2. C) Only that portion of the $800 billion actually charged in 2009 is counted in M1 and M2. D) No part of the $880 billion balance is counted in M1 and M2.
What is the tragedy of the commons? Give two examples, including one from your state
What will be an ideal response?
As the manager of a ski resort, you want to increase the number of lift tickets sold by 8 percent. Your staff economist has determined that the price elasticity of demand for lift tickets is 2. To increase sales by the desired amount, you should decrease the price of a lift ticket by:
A. 16 percent. B. 8 percent. C. 4 percent. D. 2 percent.