Jonathan likes to consume pizzas and burgers. If both the goods have diminishing marginal utility, then Jonathan's indifference curve is likely to be _____
a. a straight line
b. downward sloping
c. L-shaped
d. U-shaped
b
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A.C. Pigou argued that the government can deal with a positive externality in consumption by giving consumers a subsidy equal to the value of the externality
Indicate whether the statement is true or false
Eliza consumes 12 cappuccinos and 8 apple turnovers per week. The price of a cappuccino is $4 each and apple turnovers are $1 each
a. What is the amount of income allocated to cappuccino and apple turnover consumption? b. What is the price ratio (the price of cappuccinos relative to the price of apple turnovers)? c. Explain the meaning of the price ratio you computed. d. If Eliza maximize utility, what is the ratio of the marginal utility of cappuccinos to the marginal utility of apple turnovers? e. If the price of apple turnovers falls, will Eliza consume more apple turnovers, fewer apple turnovers, or the same amount of apple turnovers? Explain your answer using the rule of equal marginal utility per dollar.
The shortened work week coupled with rising hourly wages in the U.S. economy shows that
a. the income effect has been dominant. b. the substitution effect does not exist at all. c. the U.S. worker is no longer productive. d. workers have become increasingly lazy.
The demand for novels is ________ than is the demand for science textbooks because ________.
A. less price elastic; novels have less available substitutes. B. less price elastic; novels have more available substitutes. C. more price elastic; novels have more available substitutes. D. more price elastic; novels have less available substitutes.