Mary has an income of $50 . She spends her entire money either on burgers or on cookies. The price of a burger is $10, and the price of a cookie is $5 . Which of the following consumption bundles can Mary afford, given her income?
a. 5 burgers and 2 cookies
b. 3 burgers and 4 cookies
c. 3 burgers and 6 cookies
d. 4 burgers and 3 cookies
b
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Opportunity cost is
A) the intrinsic value of an economic good. B) the total value of all the alternatives forsaken when a choice is made. C) the value of the opportunity selected when a need is satisfied. D) the value of the next highest—ranked alternative that must be sacrificed to obtain a want.
An upward shift in the Fed's policy reaction function is a(n) ________ of monetary policy, and the aggregate demand curve ________.
A. tightening; shifts left B. easing; shifts left C. easing; shifts right D. tightening; shifts right
If one's demand for good X decreases as income rises, the income elasticity of demand for good X is
A) elastic. B) inelastic. C) unit elastic. D) negative.
If the elasticity of demand for restaurant meals is 2.27, the demand for restaurant meals is:
A. perfectly inelastic. B. inelastic. C. elastic. D. unit elastic.