If the price of a good purchased by a utility-maximizing consumer goes down, all other things remain the same, and the consumer's income is adjusted so that he can just barely attain his previous level of satisfaction, and if the consumer has indifference curves of the usual shape, it will be found that:
A. the consumer will stop purchasing the good at all.
B. more of the good will be purchased than before.
C. less of the good will be purchased than before.
D. the same amount of the good will be purchased as before.
Answer: B
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Consider the demand curves for soft drinks shown in the figure above. A movement from point a to point c represents
A) a decrease in quantity demanded. B) an increase in demand. C) an increase in quantity demanded. D) a decrease in demand.
Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or 200 units of oranges per time period. Pick the true statement:
A) The opportunity cost of 1 unit of beef in Canada is 4 units of oranges. B) The opportunity cost of 1 unit of oranges in the U.S. is 4 units of beef. C) Canada is has a comparative advantage in oranges. D) The U.S. has a comparative advantage in beef. E) None of the above is true.
"If all economists were laid end to end, they would not reach a conclusion.". Who made this whimsical observation?
a. Harry Truman b. George Bernard Shaw c. John Maynard Keynes d. Ronald Reagan
Use the following graph to answer the next question.
A firm that has the long-run cost curves shown in the graph above would not be able to ________.
A. exploit economies of scale B. serve an increasing share of the market at lower and lower unit costs C. attain lower unit costs by reducing its output level D. have an entry barrier protecting it from new entrants into the market