Pedro buys market basket A that includes 10 books at a price of $20 per book and 10 DVDs at a price of $10 per DVD. Market basket B contains 12 books and 12 DVDs. Based on this information, which of the following statements is NOT true?
A) Revealed preference analysis implies that Pedro only prefers basket B to basket A if basket A is more expensive.
B) Pedro prefers market basket B to basket A.
C) Market basket B will cost more than basket A.
D) If the prices change and Pedro chooses market basket C, which now costs the same as basket B, then basket C is prefer to basket A.
A
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The welfare effects of a quota depend, to considerable extent, upon
A) who has the quota license. B) the size of the quota. C) elasticities of domestic demand and supply. D) all of the above.
Under the Global Legal Settlement of 2002, the provision that requires investment banking firms to sever the link between underwriting and research is an example of
A) regulate for transparency. B) supervisory oversight. C) separation of functions. D) socialization of information production.
If a firm takes the wage as given, then the firm's marginal expenditure on labor curve is
A) above the labor supply curve. B) below the labor supply curve. C) the same as the labor supply curve. D) upward sloping.
If input prices for a perfectly competitive industry remain constant as the output of the industry expands in the long run, the industry supply curve will:
a. have a positive slope. b. have a negative slope. c. be perfectly horizontal. d. be perfectly vertical.