If a donut shop runs a special and sells a dozen donuts for $3.00, Tarik buys a dozen donuts each week. If donuts are not on special and the price is $6.00 per dozen, Tarik buys no donuts each week. Which of the following is true?
A. Tarik's utility from a dozen donuts is greater than $6.00.
B. The value of Tarik's utility from a dozen donuts is at least $3.00 and less than $6.00.
C. Tarik's utility from a dozen donuts is less than $3.00.
D. Tarik's demand for donuts is inelastic.
Answer: B
You might also like to view...
When Jaya Lewis was asked what it would take to get her to provide Eva Hillman an hour of tutorial lessons in economics, she replied,"$10.". So Eva said,"Fine, I'll pay you $10.". "No, no," Jaya, replied, the market price is $15!" Exasperated, Eva paid the $15 . Did Jaya change her mind about the price during the conversation?
a. Yes, she realized that Eva was willing to pay more so changed her asking price from $10 to $15. b. Yes, the $5 difference in price was obviously negotiable and Jaya went for the higher price c. No, Eva changed her mind. At first she was willing to pay $10 then decided to pay the $15. d. No, Eva was testing Jaya's willingness to supply tutorial lessons and discovered it was $15. e. No, it was simply a case of Jaya's opportunity cost being less than market price so Jaya ends up with a $5 producer surplus
The largest free trade area in the world currently is
a. South America b. Europe c. Australia d. Africa e. North America
If savings exceeds investment at full employment, demand will fall short of total output
a. True b. False Indicate whether the statement is true or false
Which of the following does not illustrate the asymmetric information problem:
A. Ordinary financial investors do not know the motivations of financial advisers B. Ordinary customers do not know how sanitarily the food is prepared in a restaurant C. Ordinary stock-buyers do not know what will happen to the stock's price next week D. Ordinary car buyers do not know the actual quality of the various cars in the dealer's lot