Suppose the price of pizza is $2 and the consumer optimum is reached when MU/P = 3. Tom's preferences for pizza are shown in the above table. How many slices will Tom buy?
A. 1 slice
B. 2 slices
C. 3 slices
D. 4 slices
Answer: B
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The iconic American drink-maker, Coca-Cola, announced plans in 2008 to buy the dominant Chinese fruit juice company for $2.5 billion. But China just rolled out a new law to guard against business monopolies
How would this rent-seeking behavior by Coca-Cola most likely affect efficiency in the drink market? A) Profit would increase. B) Producer surplus would increase. C) Consumer surplus would decrease. D) Deadweight loss would increase.
What is the underlying assumption of the original, simplified Keynesian model?
A) The relevant range of the short-run aggregate supply curve (SRAS) is vertical. B) The relevant range of the aggregate supply curve (AS) is vertical. C) The relevant range of the short-run aggregate supply curve (SRAS) is horizontal. D) The relevant range of the long-run aggregate supply curve (LRAS) is horizontal.
Liberalism suggests that public policies should aim to
a. maximize the sum of utility of everyone in society. b. maximize the well-being of the average person in society. c. maximize the well-being of the worst-off person in society. d. minimize the difference between the utility of the best-off person in the society and the utility of the worst-off person in society.
In which of the following games is it clearly the case that the cooperative outcome of the game is good for the two players and bad for society?
a. Two oil companies own adjacent oil fields over a common pool of oil, and each company decides whether to drill one well or two wells. b. Two airlines dominate air travel between City A and City B, and each airline decides whether to charge a "high" airfare or a "low" airfare on flights between those two cities. c. Two superpowers decide whether to build new weapons or to disarm. d. In all of the above cases, the cooperative outcome of the game is good for the two players and bad for society