Assume that a college student spends her income on books and pizza. The price of a pizza is $8, and the price of a book is $15 . If she has $120 in income, she could choose to consume
a. 8 pizzas and 4 books.
b. 4 pizzas and 6 books.
c. 5 pizzas and 5 books.
d. 2 pizzas and 7 books.
c
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Using the figure above, suppose with no trade Liz and Joe each produce at point A on their respective PPFs. Then, Joe suggests that they specialize and trade. He would produce only salads and Liz would produce only smoothies
Then, Joe says, he would buy 16 smoothies from Liz at a price of 1.5 salads per smoothie. Liz should A) not accept Joe's offer since she would lose 2 smoothies and 2 salads. B) accept Joe's offer, as she will be as well off as with no trade. C) accept Joe's offer since she will gain 4 smoothies and 4 salads. D) accept Joe's offer since she will gain 4 salads. E) not accept Joe's offer, as the price he offers is too low for her to gain from trade.
If market participants have rational expectations, then the best forecast of the price of a stock in the next period is
A) equal to an average of the prices of the stock in previous periods. B) equal to the price of the stock in the current period. C) dependent upon all information available in the current period, including, but not limited to, the price of the stock in the current period. D) dependent on information available in the previous period.
In peak-load pricing, once capacity is reached, the firm's short-run marginal cost curve becomes ________.
A) downward sloping B) vertical C) negative D) horizontal
Diseconomies of scale cause the short-run marginal cost curve to slope upwards
a. True b. False Indicate whether the statement is true or false