The basic truth that underlies the study of economics is the fact that we all face
A. risk.
B. scarcity.
C. death.
D. taxes.
Answer: B
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The theory of the kinked demand curve is used to explain
A. bizarre corporate behavior. B. sales maximization. C. the maximin criterion. D. sticky prices in oligopolies.
When society requires that firms reduce pollution, there is
a. a tradeoff because of reduced incomes to the firms' owners and workers. b. a tradeoff only if some firms are forced to close. c. no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements. d. no tradeoff, since everyone benefits from reduced pollution.
Suppose that at a price of 25 cents per orange, 500 consumers each demand 4 oranges, and at a price of 20 cents per orange, 750 consumers each demand 5 oranges. Therefore, the market demand for oranges is ________ at a price of 25 cents per orange and ________ at a price of 20 cents per orange.
A. 1,250; 1,500 B. 4; 5 C. 2,000; 3,750 D. 500; 750
If consumption is $30,000 when income is $35,000, and consumption increases to $36,000 when income increases to $43,000, the MPC is
A. 0.65. B. 0.75. C. 0.80. D. 0.95.