Suppose Congress consists of 5 people who want to spend X% on national defense. Let their preferences be as follows: 1, 3, 20, 21, 25. What amount will most likely be spent?
A. 14
B. 21
C. 20
D. 3
Answer: C
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If an activity is worth pursuing at all, then the only information the decision maker needs to make a choice is
a. total benefits. b. marginal benefits and marginal costs. c. variable costs. d. fixed costs.
To economists, the main difference between the short run and the long run is that:
A. fixed costs are more important to decision making in the long run than they are in the short run. B. the law of diminishing returns applies in the long run, but not in the short run. C. in the long run all resources are variable, while in the short run at least one resource is fixed. D. in the short run all resources are fixed, while in the long run all resources are variable.
Other things constant, which of the following would tend to decrease the demand for Disney World vacations?
A) A rise in the price of Hawaiian vacations (a substitute for Disney World) B) A rise in income, if Disney World vacationing is a inferior good C) A fall in the price of air travel (a complementary good) D) New information that Disney World will raise its prices after this summer E) All of the above.
Julia knows that the price elasticity of movie rentals is 3. She knows, therefore, that if she raises her price from $2 to $2.50, her rentals will drop by approximately
A. 150 percent. B. 100 percent. C. 75 percent. D. 33 percent.