Suppose you pre-ordered a non-refundable movie ticket to X-Men: Apocalypse. On the day of the movie you decide that you would rather not go to the movie. According to economists, what is the rational thing to do?
A) You should go to the movie to maximize your utility.
B) You should not waste resources. Since you have paid for the ticket you should watch the movie.
C) Your should go to the movie to minimize your losses.
D) Since the cost of the movie ticket is a sunk cost, it should not influence your decision. Your decision should be based solely on whether you want to see the movie or not.
D
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To economists, games are:
A. just recreational pursuits like chess, Monopoly, or poker. B. any situation in which players pursue strategies designed to achieve their goals. C. situations in which individuals act against their own interest for fun. D. None of these statements are true.
If a firm facing a linear demand curve experiences an increase in total revenue after lowering the price,
A. the initial price was set at a point where the demand is inelastic. B. the initial price was set at a point where the demand is elastic. C. the new price is set where the demand is perfectly elastic. D. the new price is set where the demand is perfectly inelastic.
Colin spends his income of $100 per week on two goods: pizzas (which cost $8 each) and milk (which costs $1 per gallon)
At his current level of consumption, the marginal utility from the last pizza consumed is 32 and the marginal utility from the last gallon of milk is 4 . Is Colin maximizing his utility? Why or why not? If not, what should Colin do to achieve a higher level of utility?
The threshold income level originally used to determine official poverty statistics was based on
A. a per capita income of $1,000 in 1958 prices. B. standards provided by the United Nations based on studies done in poor countries around the world. C. the highest income of the lowest one-fifth of families in the country. D. an income three times the amount of money needed to purchase a nutritionally adequate diet.