The paradox of value can be resolved by distinguishing between
A) quantity demanded and quantity supplied.
B) supply and quantity supplied.
C) normative and positive statements.
D) total utility and marginal utility.
D
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To be effective, the minimum wage must be set ________ the market-clearing wage, and this will result in a ________ of labor
A) above; surplus B) above; shortage C) below; surplus D) below; shortage
Natasha is going to buy a risky asset that has an expected value of $62, which yields an expected utility of 146. Equivalently, she could get utility of 146 from a certainty equivalent of $43. What is Natasha's risk premium?
A) $19 B) $43 C) $103 D) $105
If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?
A. The quantity of beef demanded will decrease. B. The quantity of beef supplied will increase. C. There will be a surplus of beef. D. There will be a shortage of beef.
The two tendencies of a firm in a cartel are the incentive to:
A. cheat to maximize joint profits and the incentive to raise prices. B. cheat and avoid collusion and the incentive to raise price to maximize the firm's share of profits. C. increase output in order to minimize per-unit cost and the incentive to reduce price in order to maximize joint profit. D. cooperate to maximize joint profits and to cheat on the agreement in order to increase the firm's share of the profit.