Figure 3-10
illustrates the conditions of demand and supply in the market for compact discs. Indicate the equilibrium price and quantity.
a.
price, $20; quantity, 2,000
b.
price, $15; quantity, 3,000
c.
price, $10; quantity, 2,000
d.
price, $10; quantity, 4,000
b
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Over the last 30 years, the income gap between the rich and the poor has declined.
Answer the following statement true (T) or false (F)
Ingrid has been waiting for the show "Mamma Mia!" to come to town. When it finally does come, tickets cost $60. Ingrid's reservation price is $75. But when Ingrid tries to buy a ticket, they are sold out. Ingrid decides to try to buy a ticket from a scalper (a person who purchased extra tickets at the box office with the intent to resell them at a higher price). If Ingrid finds someone who is willing to sell her a ticket for $70, she should:
A. purchase the ticket because doing so will make her $5 better off. B. purchase the ticket even though doing reduce total economic surplus. C. not purchase the ticket because it is overpriced. D. not purchase the ticket because the cost to the scalper was only $60.
John loves to travel. He would never turn down the opportunity to go on a trip. This means that, for John:
A. the total utility of travel always increases. B. marginal utility of travel never decreases. C. the law of diminishing marginal utility does not apply to travel. D. marginal utility of travel is always zero.
Which of the following statements is true?
A) Models help economists to explain the past, but do not help in predicting the future. B) The scientific method used by economists is based on idealism and not empiricism. C) Testing with data enables economists to distinguish between good models and bad models. D) Models that economists use are perfect replicas of reality.