A decrease in the demand for recreational fishing boats might be caused by an increase in the:
A. size and number of fish available.
B. income of sports fishers.
C. price of sailing boats.
D. price of outboard motors.
Answer: D
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Making optimal decisions "at the margin" requires
A) making consistently irrational decisions. B) weighing the costs and benefits of a decision before deciding if it should be pursued. C) making decisions according to one's whims and fancies. D) making borderline decisions.
If a perfectly competitive firm raises the price it charges to consumers, which of the following is the most likely outcome?
A) The firm's total revenue will increase only if the demand for its product is elastic. B) The firm's total revenue will increase only if the demand for its product is inelastic. C) The firm will not sell any output. D) The firm's revenue will not change because some consumers will refuse to pay the higher price.
An economy experiencing an expansionary gap: a. operates in an environment in which labor shortages drive up money wages, real wages, and prices. b. has an excess supply of labor due to rising money wages and prices
c. will self-correct as rising money wages decrease faster than rising prices. d. will experience rising money wages and prices but falling real wages. e. will have excessive involuntary unemployment.
A consumer's budget line shows
a. the utility that an individual would receive from consuming various combinations of two goods b. the combinations of two goods that an individual is able to purchase, given prices and income c. how income is influenced by prices of goods d. how changes in income affect utility e. the relationship between prices and income