Jeremy maximizes utility by consuming both iced tea and coffee. Iced tea is priced at $1.50 per bottle and coffee at $2.00 per 16-ounce cup. Which of the following marginal utility pairs is inconsistent with Jeremy's consumer equilibrium at these prices?
a. MU of iced tea = 3; MU of coffee = 4
b. MU of iced tea = 4; MU of coffee = 3
c. MU of iced tea = 6; MU of coffee = 8
d. MU of iced tea = 3/4; MU of coffee = 1
b
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There are very few, if any, good substitutes for motor oil. What does this imply?
a) The supply of motor oil would tend to be price elastic. b) The demand for motor oil would tend to be price elastic. c) The demand for motor oil would tend to be price inelastic. d) The demand for motor oil would tend to be income elastic.
A firm switching from a single price to a price discrimination scheme will ________ the price for the group of consumers with a relatively elastic demand and ________ the price for the group of consumers with a relatively inelastic demand.
A. decrease; increase B. decrease; decrease C. increase; increase D. increase; decrease
The text argues that if avocado growers in Mexico can produce avocadoes cheaper than avocado growers in the United States, this will not reduce total jobs available in the United States. The logic underlying this argument is that
A) avocado growers in the United States did not earn much anyway. B) avocado growers in the United States are welcome to emigrate to Mexico. C) avocado growers in the United States will switch to specializing in a crop in which they hold the comparative advantage. D) avocado growers in Mexico need the jobs more than Americans do.
In 2011, Standard & Poor's (S&P) changed its rating on U.S. Treasury bonds from ________ based on the state of the federal government's budget deficit
A) "A" to "D" B) "A" to "AAA" C) "A+" to "B+" D) "AAA" to "AA+"