In general, the substitution effect of an increase in the price of a normal good:
A. will cause the individual to buy more of that good because they have relatively more income.
B. will cause the individual to buy less of that good and more of others because it is relatively more expensive.
C. will cause the individual to buy less of that good because they have relatively less income.
D. will cause the individual to buy more of that good and less of others because it is relatively less expensive.
Answer: B
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Refer to the figure above. What is the domestic demand for calculators in Barylia, once the economy opens up to free trade?
A) 20 units B) 50 units C) 60 units D) 100 units
The first mover in an extensive-form game should use ________ to win the game
A) forward induction B) backward induction C) pure strategies D) mixed strategies
Some economists and policymakers who are in favor of government-provided health care believe that providing health care will
A) create negative externalities. B) generate more adverse selection. C) reduce asymmetric information. D) generate additional moral hazard.
Suppose a publisher faces the following costs of producing 10,000 newspapers each month: $5,500 cost of labor; $2,200 monthly mortgage payment; $250 cost of electricity to run the printing presses; $800 for ink and paper; and $200 in city property taxes (based on the value of the building and land). Its total variable costs are
a. $8,950 b. $8,750 c. $6,550 d. $6,300 e. $5,500