Figure 5-5 shows a consumer budget line for French fries and hamburgers. If the household has $20 to spend, the price of hamburgers is
A. $1.
B. $2.
C. $4.
D. $2.50.
Answer: B
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The marginal social cost (MSC) function is the sum of the following:
a. market-level marginal abatement cost (MACmkt) + marginal cost of enforcement (MCE) b. marginal abatement cost (MAC) + marginal external cost (MEC) c. marginal abatement cost (MAC) + total social cost (TSC) d. market-level marginal abatement cost (MACmkt) + marginal external cost (MEC)
Which of the following is a possible reason for a comparatively steeper demand curve for health care? a. A large increase in the price of health care leads to a more than proportionate fall in the quantity demanded for health care. b. The demand curve for health care is comparatively steeper than other products, because health care is a Giffen good. c. A change in the price of health care
leads to no change in the profit earned by the suppliers. d. A large increase in the income of households leads to a less than proportionate increase in the quantity demanded. e. A large increase in price does not cause a reduction in the purchase of health care by the same proportion.
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls and current international transactions become more positive (or less negative). b. The quantity of real loanable funds per time period rises and current international transactions become more negative (or less positive). c. The quantity of real loanable funds per time period and current international transactions remain the same. d. The quantity of real loanable funds per time period rises and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which one of the following statements concerning employee discrimination is not true?
A. Workers accept the utility-maximizing job offer even when there is employee discrimination. B. Employee discrimination does not affect the profitability of firms as long as firms can employ segregated work forces. C. Employers have no reason to employ a segregated workforce if there is employee discrimination. D. Discriminating employees act as if their wage is less than it actually is if they are employed by a firm that has an integrated workforce. E. Employee discrimination will not produce a wage differential between equally skilled black and white workers.