If two goods are complements, then their
A) indifference curves are positively sloped straight lines.
B) indifference curves are negatively sloped straight lines.
C) indifference curves are L-shaped.
D) marginal rate of substitution is infinity.
C
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Consider a lake stocked with fish. The total value of fish caught at the lake depends on the number of fishers, as shown in the accompanying table. As the table indicates, 1 fisher can catch $36 worth of fish in a day, 2 fishers can catch a total of $66 worth of fish, 3 fishers can catch a total of $90 worth of fish, and so forth. The fishers are identical, and the opportunity cost of a day at the lake is $18 for each fisher.
(i) Complete the table by calculating the value of each fisher's catch, on average, and the social marginal benefit of the lake.
(ii) If use of the lake is nonexcludable, how many fishers come to the lake? What is the total value of their catch? What is their total cost? What is the social gain from the existence of the lake?
(iii) What is the optimal number of fishers at the lake? What is the social gain if this optimum is achieved?
(iv) What entrance fee would lead to the optimal outcome?
As national income increases, consumption spending increases as well, always by the same amount. That is, as national income increases, MPC remains constant, according to
a. Duesenberry's relative income hypothesis b. Keynes's absolute income hypothesis c. Friedman's permanent income hypothesis d. Modigliani's life-cycle hypothesis e. real asset theory
You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should
a. compare the total cost of your education to the total benefits of your education. b. compare the total cost of your education to the benefits of staying one more semester. c. compare the cost of staying one more semester to the benefits of staying one more semester. d. compare the total benefits of your education to the cost of staying one more semester.
You are a collector of baseball cards. In 2018, you purchase a Madison Baumgartner baseball card printed in 2012. This baseball card
A. is included in the 2012 GDP. B. is in the 2012 and 2018 GDP. C. excluded from the 2012 GDP. D. included in the 2018 GDP.