Which of the following scenarios describes an action that is not rational from an economic point of view?
A) After drinking one martini (shaken, not stirred), James buys and drinks a second martini even though the marginal benefit of the second martini is lower than the marginal benefit of the first.
B) Eric buys a replacement ticket to the basketball game after he realizes that he accidentally left his original ticket at home.
C) Emily chooses to attend a social event on Tuesday night instead of studying even though she has an important exam on Wednesday morning.
D) US Airways sells a last minute ticket to Don for $50 even though its average cost per passenger is $250.
E) None of the above
E
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Because of asymmetric information, most used cars that are offered for sale will be sold for prices that are greater than their true value. Because of this fact, the used car market falls victim to
A) the free-rider problem. B) adverse selection. C) deadweight loss and economic inefficiency. D) a surplus of used cars.
If you buy a brand new, American-made laptop computer to track stock prices in your career as a stockbroker, then it will be classified in GDP accounting as
a. a change in business inventory b. a consumption expenditure c. an investment expenditure d. a service good e. a household expenditure
Suppose that a jewelry store found that when it increased prices by 10 percent, sales revenue increased by 3 percent. Which of the following is true about the price elasticity of demand for the store's goods?
A. Demand is perfectly inelastic. B. Demand is inelastic, but not perfectly. C. Demand is perfectly elastic D. Demand is elastic, but not perfectly.
The firm's short-run supply curve runs up the marginal cost curve
A. to the shutdown point. B. from the shutdown point all the way up the curve. C. to the break-even point. D. from the break-even point all the way up the curve.