(Consider This) Unlike newspaper dispensing devices, soft drink dispensing machines do not permit people to take more than one can or bottle with each payment. The reason is that the:
A. opportunity cost of additional cans or bottles of a soft drink increase very rapidly.
B. marginal utility of extra soft drink cans or bottles declines slowly, particularly because they
are storable and can be consumed later.
C. marginal utility of extra soft drink cans or bottles declines quite rapidly.
D. opportunity cost of additional cans or bottles of soft drink increases very slowly.
Answer: B
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The rate at which a person is willing to give up a gallon of gasoline to get one more pound of coffee and remain on the same indifference curve is called his or her
A) relative cost of coffee in terms of gasoline. B) indifference cost of coffee. C) personal price of coffee. D) marginal rate of substitution.
Unanticipated inflation will hurt ________ and help ________
A) pensioners; borrowers B) borrowers; pensioners C) the government; tax payers D) homeowners; banks
For the regression equation Q = 100 - 10X + 0.25X2, which of the following statements is true?
A) X2 is the more important variable because it is positive. B) When X decreases by one unit, Q decreases by 10 units. C) When X increases by 10 units, Q decreases by 1 unit. D) The change in Q associated with a one unit increase in X depends on the initial level of X.
As the price of gasoline rose during the 1970s, consumers cut back on their use of gasoline relative to other consumer goods. This situation contributed to which bias in the consumer price index?
a. Substitution bias. b. Transportation bias. c. Quality bias. d. Indexing bias.