Ten individuals have $100 and identical preferences for picnics, p, and kayak trips, k, where U(p, k) = k0.5p0.5. The price of picnics is $5 and the price per kayak trip is $ 10
What is the shortage/surplus in the market when the supply of picnics totals 120? A) There is a surplus of 20.
B) There is a shortage of 20.
C) The market is in equilibrium. Therefore, there is no surplus/shortage.
D) There is not enough information to answer this question.
A
You might also like to view...
Fracking involves:
A) extracting certain forms of energy from shale rock formations B) deep water drilling for energy with minimal externalities C) the reduction of menu costs thus allowing prices to adjust more freely D) breaking down the production of goods resulting in more competitive markets
The Federal Trade Commission Act was passed in:
a. 1890. b. 1914. c. 1929. d. 1933.
The poverty threshold is often determined in terms of the expenditure on meals that meet a predetermined nutritional standard
a. True b. False Indicate whether the statement is true or false
Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the centrist Democrat suggests an increase to infrastructure spending. Suppose the centrist Republican suggests an increase in cyber-defense spending. The Democrat says that, on average, infrastructure spending does the most good, so more is better. The Republican is arguing that the extra cyber-security purchased by the extra spending will increase well-being the most. What is going on here?
A. Both are employing marginal analysis, just from different perspectives. B. Only the Republican is using marginal analysis. C. Neither are using marginal analysis. D. Only the Democrat is using marginal analysis.