Marginal rate of substitution between X and Y is
a. total utility of X divided by total utility of Y.
b. marginal utility of X divided by marginal utility of Y.
c. total utility of X divided by marginal utility of Y.
d. none of the above.
b. marginal utility of X divided by marginal utility of Y.
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Keynesians explain the procyclical behavior of average labor productivity by introducing the concept of
A) menu costs. B) sticky prices. C) labor hoarding. D) sticky wages.
Strategic behavior and game theory are features of which market structure?
A) perfect competition B) monopoly C) monopolistic competition D) oligopoly
Refer to the graph shown. If this monopolist were allowed to choose the profit-maximizing level of output, it would produce:
A. 400 units of output. B. 800 units of output. C. 500 units of output. D. 300 units of output.
In the country of Bora Bora, consumers buy large quantities of alcohol, tobacco, and coffee. Last year, the prices of these goods each increased by 10 percent. The quantities demanded for these goods fell by 10, 3, and 8 percent, respectively. If the government is thinking about imposing a unit tax on one of these goods, which good should they choose to tax to raise the most tax revenue, and why?
A. Alcohol; because the price elasticity is highest. B. Tobacco; because the price elasticity is lowest. C. Coffee; because it will have the lowest tax elasticity. D. Tobacco; because it will have the highest tax elasticity.