For a consumer not bound by the collateral constraint, a reduction in the price of the collateral leads to
A) nothing.
B) an increase in current consumption and a decrease in future consumption.
C) a decrease in current consumption and no change in future consumption.
D) a decrease in current and future consumption.
D
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If a marginal cost pricing rule is imposed on the natural monopoly shown in the figure above, then the deadweight loss will equal
A) $0. B) $4 million. C) $8 million. D) $12 million.
If you purchase one pound of apples the price is $1.50 per pound. If you buy a five pound bag of apples, the cost is $5.00. This is most likely an example of
A) quantity discounts. B) lower marginal cost. C) lower marginal benefit. D) price gouging.
Positive economics is concerned with ________________, whereas normative economics deals with _________________.
a. value judgments; factual statements b. opinions; facts c. what is; what should be d. what should be; what is
Refer to the information provided in Table 20.1 below to answer the question(s) that follow. Table 20.1
Refer to Table 20.1. In Guatemala, the opportunity cost of 1 bushel of oranges is
A. 1/2 bushel of bananas. B. 1 bushels of bananas. C. 2 bushels of bananas. D. 4 bushels of bananas.