Figure 15.3 depicts a one-mile stretch of beach with 100 swimmers distributed evenly along the beach. There are two ice cream vendors - 1 and 2 - on the beach selling an identical product. Assume that each swimmer buys only one ice cream cone and that they prefer to buy ice cream from the nearer vendor. If neither vendor has an incentive to adjust their locations:
A. vendor 1 is at B while vendor 2 is at C.
B. vendor 1 is at A and while vendor 2 is at D.
C. vendor 1 is at A while vendor 2 is at E.
D. both vendors are at C.
Answer: D
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An important assumption made when constructing a demand curve is that
A. only price and quantity matter in determining the demand for a good. B. people always want a certain amount of the good. C. demand is always dependent on the supply of a good. D. all other determinants of demand are held constant. E. the demand curve has a positive slope.
The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, the amount of enrollment is
A) efficient. B) inefficient because marginal social cost exceeds marginal social benefit. C) inefficient because marginal social benefit exceeds marginal social cost. D) inefficient because the quantity of education demanded exceeds the quantity of education supplied.
In 2015, the labor force participation rate was 62.6 percent. This means that:
A. 62.6 % of all working age people wanted a job. B. there was 37.4 % unemployment. C. 62.6 % of all working age people were employed. D. only 62.4 percent of labor force was in working age population.
Which of the following statements best captures the intuitive reason behind discounting?
A) Since incomes rise over time, discounting means that we place less weight on benefits and costs today and more weight on benefits in the future. B) Since dollars today can be invested, to obtain $1 in the future we have to give up less than $1 today. Hence future benefits and costs are given more weight than benefits and costs today. C) Since investments yield a return, we have to give up less than $1 today to obtain $1 in future benefits. Hence we place less weight on future benefits and costs than we would on benefits and costs that dollars occur today. D) Since dollars today can be invested, yielding a positive return, discounting places more weight on future returns.