Saccharin and aspartame are both low-calorie substitutes for sugar. If saccharin is found to cause cancer,
a. the price of aspartame will increase
b. the price of sugar will decrease
c. the price of saccharin will increase
d. the demand curves for aspartame and sugar will shift leftward
e. aspartame and sugar will be complements
A
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The funds that polluters pay that gives them the right to discharge into the air or water a certain amount of pollution are
A) special subsidies. B) regulation fees. C) external costs. D) effluent fees.
Suppose we can represent Brandon's preferences for water with an expected utility function U(WR, WD) = (1/4)?WR + (3/4)?WD, where WD represents a quantity of water during a drought and WR represents a quantity of water in a rainy season. Brandon is:
A. risk averse. B. risk neutral. C. risk loving. D. There is not enough information to answer this question.
Suppose you are a risk-neutral manager attempting to hire a new sales manager. All of the workers in the market have the same ability to manage and sell, but they differ with respect to the wage at which they are willing to work for your company. The market for sales managers is composed of three types of individuals: 85 percent are willing to work for $75,000 and 15 percent are willing to work for $85,000. The first interviewee is only willing to work for $85,000. If the human resource director spends five hours interviewing each candidate and the opportunity cost of this director's time is $500, then the director should:
A. search again since the expected benefit of an additional search exceeds the cost. B. stop searching since the expected benefit of an additional search is less than the cost. C. stop searching since the expected benefit of an additional search exceeds the cost. D. search again since the expected benefit of an additional search is less than the cost.
A technological improvement can cause the production possibilities curve to shift outward because
A. maximum feasible outputs of both goods increase. B. it increases costs and contributes to lower production rates. C. it causes increases in unemployment. D. production will fall, but jobs will be saved.