Sarah spends 100 a year on magazines and ice cream. The table above shows her utility from each good. If the price of a magazine is 5 and the price of ice cream is 5 per gallon, how does Sarah spend the 100?
What will be an ideal response?
Ques. 2Higher ethanol production definitely and directly raises the price of corn, said USDA economist Ephraim Leibtag. In the short run in the corn market, what is TRUE if the production of ethanol increases?
A) The demand curve for individual corn farmers will shift upward.
B) The price individual corn farmers receive will decrease.
C) The total cost curve for individual corn farmers will shift upward.
D) The marginal cost curve for individual corn farmers will shift downward.
Ques. 3If a monopsony must negotiate with a union, then the wage will probably be
A) more than the value of marginal product.
B) more than the marginal cost of labor.
C) the same as if there had been no union.
D) more than what it would have been without a union but not more than the value of marginal product.
Ques. 4In the figure above, the elasticity of demand facing the monopoly equals one when it produces ________ units of output.
A) h
B) j
C) k
D) none of the above
Ques. 5When external benefits are present,
A) competitive markets are efficient.
B) competitive markets are inefficient.
C) a tax is required to eliminate the inefficiency.
D) property rights have already been established.
Quick Reply
