From Table 2.1, and under the most likely scenario where columns A and B are assigned to represent quantity demanded and quantity supplied, which is the equilibrium quantity?
A. 1 unit
B. 2 units
C. 3 units
D. 4 units
Answer: C
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If the marginal product of labor is equal to 5 and the marginal product of capital is 2, what is the marginal technical rate of substitution?
What will be an ideal response?
The model of monopolistic competition assumes that
a. there are only a few sellers b. there are significant barriers to exit c. each firm charges the same price for its output d. the buyers are price setters e. firms are strategically independent
James enjoys gardening in the nude because he says it puts him in touch with nature. His neighbors find his gardening routine very offensive, but James replies that they should mind their own business and not watch him. To an economist this situation illustrates the concept of:
A. a positive externality. B. adverse selection. C. a negative externality. D. the tragedy of the commons.
The income elasticity of demand refers to:
A. a change in income following a change in quantity demanded. B. the change in income required for quantity demanded to change by 1%. C. the substitution of one good for another as income changes. D. the percentage change in quantity demanded resulting from a 1-percent increase in income.