A) The indifference curves for $5 bills and $10 bills will be:
a. L-shaped b. A straight line with a negative slope c. A straight line with a positive slope d. cocave
B) Sue is choosing between wine and cheese. The price of wine is $10 and the price of cheese is $5. If Sue's current marginal rate of substitution is 1, and if wine is on the horizontal axis and cheese is on the vertical axis then Sue is purchasing
a. Too much cheese b. Just the right amount of both goods c. Too much wine d. More than what her income would allow
C) For the demand function P=20-2Q
a. Demand is inelastic at price 16 b. unitary elasticity occurs at price 2 c. total revenue is maximized at price 12 d. demand is elastic at price 12
I think A) is b. because they are substitutes but I'm unsure because I know you'll need twice as many $5 bills to make up for the $10 billsbut I don't know if that makes a difference in this situation.
I think B) is c. And I think C) is d. just because it looks like the right answer but I'd like to see the work on it to show how to get to the right answer regardless.
A) The indifference curves for $5 bills and $10 bills will be:
a. L-shaped b. A straight line with a negative slope c. A straight line with a positive slope d. cocave
B) Sue is choosing between wine and cheese. The price of wine is $10 and the price of cheese is $5. If Sue's current marginal rate of substitution is 1, and if wine is on the horizontal axis and cheese is on the vertical axis then Sue is purchasing
a. Too much cheese b. Just the right amount of both goods c. Too much wine d. More than what her income would allow
C) For the demand function P=20-2Q
a. Demand is inelastic at price 16 b. unitary elasticity occurs at price 2 c. total revenue is maximized at price 12 d. demand is elastic at price 12
I think A) is b. because they are substitutes but I'm unsure because I know you'll need twice as many $5 bills to make up for the $10 billsbut I don't know if that makes a difference in this situation.
I think B) is c. And I think C) is d. just because it looks like the right answer but I'd like to see the work on it to show how to get to the right answer regardless.
Unlock all answers
Related textbook solutions
Related questions
1
The following table shows the market demand schedule and supply schedule for notebooks.
|
Price ($/unit) |
Quantity Demanded (units) |
Quantity Supplied (units) |
|
1 |
20 |
4 |
|
2 |
16 |
6 |
|
3 |
14 |
10 |
|
4 |
12 |
12 |
|
5 |
10 |
14 |
|
6 |
7 |
17 |
|
7 |
4 |
20 |
|
8 |
2 |
22 |
|
9 |
1 |
25 |
Refer to the table above. Assume that the market for notebooks is in equilibrium.
1. Which of the following is likely to happen if there is an increase in the school enrollment rate, everything else remaining unchanged?
A. Both the equilibrium price and quantity of notebooks decrease.
B. The equilibrium price and quantity remain unchanged.
C. Both the equilibrium price and quantity of notebooks increase.
D. The equilibrium price increases, but the equilibrium quantity of notebooks decreases.
2. A shortage occurs in a market when:
A.price is lower than the equilibrium price.
B. price is higher than the equilibrium price.
C. supply exceeds demand.
D. the marginal utility of consumption is negligible.
3. A change in the quantity demanded of a good is:
A. the outcome of a change in income.
B. the outcome of a change in tastes and preferences.
C. represented by a shift to a new demand curve.
D. represented by a movement along the demand curve.
4. The following table shows the demand schedules of three consumers of wine. Assume that these three buyers constitute the entire market.
|
PRICE ($/Bottle) |
Sandra's Demand (Bottles) |
David's Demand (Bottles) |
Mary's Demand (Bottles) |
|
â$8 |
2 |
10 |
|
|
â$6 |
14 |
15 |
18 |
|
â$4 |
23 |
24 |
|
|
â$2 |
24 |
27 |
28 |
Refer to the table above. If the market price of wine is $8/bottle, and the market demand for wine is 19 bottles, David's consumption of wine is:
A. 12 bottles.
B. 9 bottles.
C. 4 bottles.
D. 7 bottles.
5. Which of the following factors will NOT cause a shift in the demand for a good?
A. A change in the number of consumers
B. A change in the market price of the good
C. A change in tastes and preferences
D. A change in consumer incomes
6. Are all markets perfectly competitive?
A. No, there are other market types where firms have considerable power to control the price.
B. Yes, any economic system with a market structure is by definition perfectly competitive.
C. No, there are also command and control markets that are run by a central government.
D. No, in other types of markets, sellers offer identical goods and simply accept the market price.
7. Assume that a seller in a perfectly competitive market charges more than the equilibrium price. It is likely that this seller will:
A. increase his profit.
B. lose only a few buyers.
C. increase his sales.
D. lose almost all of his buyers.
8. The willingness to pay for a commodity:
A. increases as the consumption of the commodity increases.
B. is always less than the market price of the commodity.
C. decreases as the consumption of the commodity increases.
D. is always greater than the market price of the commodity.
9. Which of the following is likely to lead to a right shift in the supply curve of cotton?
A. An increase in labor productivity due to training programs
B. A rise in labor costs due to wage demands by labor unions
C. An increase in the price of cotton
D. A decrease in the price of cotton
10. The buyers of a good will want to purchase it as long as their willingness to pay for the good is:
A. equal to zero.
B. greater than or equal to the price.
C. greater than zero.
D. less than the price.
