Figure 3.3 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $15, there is an:
A. excess demand of 8 t-shirts.
B. excess supply of 8 t-shirts.
C. excess demand of 10 t-shirts.
D. excess supply of 10 t-shirts.
Answer: B
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When a demand curve is vertical, the elasticity of demand is equal to
A. 0. B. 1. C. ?. D. -1.
If the demand curve for a product is horizontal, then
A) the demand for the good is perfectly inelastic. B) consumers are not responsive to price changes. C) its price elasticity of demand approaches infinity. D) consumers may purchase all they want to at the established market price.
Refer to the data provided in Table 11.1 below to answer the following question(s).
Table 11.1 
Refer to Table 11.1. If the interest rate is 25%, Nashbar Bicycle's total investment would be
A. $0. B. $100,000. C. $500,000. D. $1,100,000.
A bottle of wine costs $8 and a quiche costs $5. At Robert’s present levels of consumption, he spends all his income and receives marginal utility of $10 from the last bottle of wine and marginal utility of $4 from the last quiche. To maximize his total utility, Robert should
A. buy less wine and more quiche. B. buy more wine and less quiche. C. spend all of his money on wine. D. change his spending pattern until he buys 8/5ths as much wine as quiche.