In Figure 6.7 with a quantity constraint of Q1, consumer surplus is area:
A. A.
B. A + B + C.
C. E + F + G.
D. B+E+G.
Answer: A
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The quantity of dollars demanded by foreign nations increases as
A) U.S. residents purchase more foreign goods. B) foreigners purchase more U.S. goods. C) more U.S. residents travel abroad. D) U.S. exports fall.
Dan is the owner of a price-taking company that manufactures sporting goods. One particular facility Dan owns produces baseball bats and baseball gloves. His cost function for baseball bats is CB(QB, QG) = 100QB + QB2 + QBQG and the marginal cost is MCB = 100 + 2QB + QG, where QB is the output level for bats and QG is the output level for gloves. Dan's cost function for baseball gloves is CG(QB, QG) = 50QG + QG2 + QGQB, and the marginal cost is MCG = 50 + 2QG + QB. The price of a baseball bat is $240 and the price of a baseball glove is $150. If Dan were to shut down his production of bats and only produce gloves, what would be his profit-maximizing sales quantity of gloves?
A. 20 B. 25 C. 30 D. 50
Your bike is worth $100 and if you park it outside at school there is a 25% chance that it will be stolen. Your utility function for money is U = 100(M). Assume throughout that the bike value and money are interchangeable since you could sell the bike instantly at its value if necessary. What is the maximum you will pay the campus security for the safekeeping service now?
What will be an ideal response?
Maurice loses his job and decides to sit on the beach rather than looking for work the next few months. Other things the same, the unemployment rate
a. increases, and the labor-force participation rate is unaffected.
b. increases, and the labor-force participation rate decreases.
c. decreases, and the labor-force participation rate increases.
d. decreases, and the labor-force participation rate decreases.