Observations of consumer behavior suggest that when the price of gasoline rose above $3.50 per gallon, consumer demand for gas became considerably more price elastic
Indicate whether the statement is true or false
TRUE
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The above table shows Sue's total utility from golf and tennis. If the price of each hour of golf is twice the price of each hour of tennis, and Sue plays four hours of tennis, then Sue plays
A) one hour of golf. B) two hours of golf. C) three hours of golf. D) four hours of golf.
Refer to Figure 2-9. The opportunity cost of obtaining 15 additional toasters by moving from point D to point C is
a. 10 toothbrushes. b. 20 toothbrushes. c. 30 toothbrushes. d. none of the above; the economy cannot move from point D to point C.
A major problem with using the egalitarian principle to distribute income is that
A) it would eliminate the incentives that rewards provide in an economic system. B) it is difficult to know when an equal distribution of income has been achieved. C) it would not be fair to the wealthy. D) there exist no mechanisms to carry out such a scheme.
Economic efficiency is achieved at a particular output level if:
A. average fixed cost is as low as possible. B. average total cost is as low as possible. C. average variable cost is as low as possible. D. marginal cost is as low as possible.