Which of the following pairs is the most likely to exhibit an inverse relationship?
A. The amount of time you study and your grade point average.
B. People's annual income and their expenditure on personal computers.
C. Baseball players' salaries and their batting averages.
D. The price of a concert and the number of tickets people purchase.
Answer: D
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Resources are
a. scarce for households but abundant for the whole economy b. abundant for households but scarce for the whole economy c. scarce for households and scarce for the whole economy. d. abundant for households and the whole economy.
If the price rises and the total amount consumers spend on the good falls to zero, then demand must be
A. perfectly elastic. B. elastic. C. perfectly inelastic. D. inelastic.
Suppose a 50-seat bus is about to depart from Boston to New York with five empty seats. The total cost to the bus company of the trip is $1,000 and no services, food, or beverages are provided to passengers. Use marginal analysis to develop conditions under which the bus company would be willing to sell tickets for the five remaining seats.
A. The bus company would be willing to sell the five remaining tickets at a price of at least $20 each to cover the cost per seat of those passengers. B. The bus company would be willing to sell the five remaining tickets at any price over $0 because there is no additional cost of five more passengers. C. The bus company would not be willing to sell the five remaining tickets because it already covered the cost of the trip with the revenue from the 45 passengers on board. D. The bus company would be willing to sell the five remaining tickets at a price of at least $25 each because they need to make a profit on each passenger.
Which of the following is often intended as an effect of a rescue package provided to a country?
A. It repels new private foreign lending to the country. B. It helps to avoid the problem of moral hazard. C. It limits any contagion effects. D. It stimulates the outflow of capital from the country.