Abby, Bobbi, and Deborah each buy ice cream and paperback novels to enjoy on hot summer days. Ice cream costs $5 per gallon, and paperback novels cost $8 each. Abby has a budget of $80, Bobbi has a budget of $60, and Deborah has a budget of $40 to spend on ice cream and paperback novels. Who can afford to purchase 4 gallons of ice cream and 5 paperback novels?
a. Abby, Bobbi, and Deborah
b. Abby only
c. Abby and Bobbi, but not Deborah
d. None of the women can afford to purchase 4 gallons of ice cream and 5 paperback novels.
c
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Like tariffs, quotas tend to lead to
A) higher prices and reduced imports. B) increased government revenue. C) increased consumer surplus. D) All of the above.
If there is no one who is interested in borrowing from a bank:
a. the bank's excess reserves will be zero. b. there will be no process of money creation. c. the required reserve ratio must be equal to zero. d. the required reserve ratio must be equal to 100 percent.
A village has five residents, each of whom has an accumulated savings of $50. Each villager can use the money to buy a government bond that pays 10 percent interest per year or to buy a year-old goat, send it onto the commons to graze, and sell it after one year. The price of the goat that the villager will get at the end of the year depends on the amount of weight it gains while grazing on the commons, which in turn depends on the number of goats sent onto the commons, as shown in the table below. Assume that if a villager is indifferent between buying a bond and buying a goat, the villager will buy a goat.Number of goatson the commonsPrice per 2-yearold goat ($)Income pergoat ($/year)180302752537020465155555 What is the socially optimal number of goats to be sent out onto the commons?
A. 2 B. 5 C. 4 D. 3
An example of an exclusive union would be
A. the International Brotherhood of Teamsters. B. the Professional Air Traffic Controllers Organization. C. the United Auto Workers. D. the International Ladies Garment Workers Union.