As the price of a good increases:
a. that good will yield less satisfaction per dollar than before.
b. consumers will have more real income to spend on other goods.
c. the quantity demanded of that good will also increase.
d. the utility-maximizing quantity of that good willl not change.
e. consumers will buy the good and substitute away from other goods.
a
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A perfect price discriminating monopoly
A) captures all consumer surplus. B) creates deadweight loss. C) increases market inefficiency. D) decreases total welfare.
Assume a society can produce either beer or wine. If the marginal rate of transformation of gallons of beer into gallons of wine is 0.5, then the opportunity cost of wine is
A. the additional 0.5 gallons of beer that can be produced. B. the 0.5 gallons of beer that must be forgone. C. the 2 gallons of beer that must be forgone. D. the 2 gallons of wine that must be forgone.
The term frictional unemployment refers to persons who are out of work
a. due to technological change. b. due to strikes or lockouts. c. and have given up looking for work. d. because they are between jobs.
A sunk cost is
A) another term that means opportunity cost. B) a term used to describe the cost of capital that the owners of a firm sink into their business. C) the highest valued alternative that must be given up to engage in an activity. D) a cost that has already been paid and cannot be recovered.