Tom's consumption possibilities is defined by
A) his income and the prices of the goods that he consumes.
B) his preferences for consumption of the goods that he consumes.
C) the prices of the goods that he consumes only.
D) his income only.
A
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At the equilibrium point of a market,
a. supply equals demand. b. neither demanders nor suppliers are satisfied. c. the quantities supplied and demanded are equal. d. suppliers will refuse any price increases offered by demanders.
Suppose the price of chocolate chip cookies is $4.00 per pound and the price of a slice of cake is $2.00 per slice. The relative price of cookies in terms of cake is
A) $2.00 per cookie. B) $4.00 per cookie. C) 1/2 slice of cake per cookie. D) 2 slices of cake per cookie.
A poll conducted by a national firm finds that most Americans say they care more about safety when buying a car than about fuel efficiency. As a result, a car maker produces a car with many safety features, but it doesn't sell well. This behavior
A) contradicts economic theory because the people didn't do what they said they would do. B) contradicts economic theory because it is irrational not to purchase safer cars. C) does not contradict economic theory because economists focus on what people do rather than on what they say. D) does not contradict economic theory because economic theory only relates to prices and not to features such as safety.
Answer the following statements true (T) or false (F)
1. A major characteristic of a monopoly is the ability of the monopolist to influence price. 2. A monopolist must produce a good for which there are no close substitutes. 3. U.S. patents grant a lifetime monopoly on an invention. 4. Public utilities are often called natural monopolies. 5. No U.S. firm has ever obtained sufficient control over raw materials to develop a monopoly or near monopoly on that basis.