Gigi consumes only Perrier and cheese. In order to maximize her happiness subject to limited income, Gigi should purchase the amounts of Perrier and cheese at which
A. the addition to happiness of the last bottle of Perrier is the same as the addition to happiness of the last pound of cheese.
B. the addition to happiness per dollar spent on Perrier is the same as the addition to happiness per dollar spent on cheese.
C. she spends all her income.
D. both b and c
E. both a and c
Answer: D
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The Gulf Cartel and Sinaloa Cartel are the two major cartels in illegal drug trade in Mexico. Although, each of these cartels are better off sharing the market, they have an incentive to try to take the entire market. In which of the following ways is cheating among these cartel members dealt with in this region?
a. Through government taxation policy b. Through legally enforceable contracts c. Through restrictions on the supply of inputs used by the firms d. Through output quota and price ceiling e. Through violence and drug wars
2.3 Discretionary Policy
What will be an ideal response?
The economic way of thinking includes:
A) attention paid to the opportunity costs involved in any choice. B) the assumption that individuals choose to average out some objective. C) concern with the biological make up of decision makers. D) emphasis on how choices affect total values rather than marginal values.
What is the glue that holds modern economics together?
A. The invisible hand theorem B. The supply and demand model C. Modeling D. The economic decision rule