Rational ignorance means
A) ignorance is rationed.
B) the benefit from some information is not worth the cost of collecting it.
C) some people do not understand rationality.
D) the information is unavailable.
Ques. 2The figure above shows a consumer is indifferent between points
A) d and c.
B) a, b, c, d, and e.
C) e and d.
D) b and a.
Ques. 3Teddy buys only chocolate chip cookies and hot chocolate and spends all of his income on the two items. Suppose the price of a cookie rises. According to marginal utility theory, Teddy buys
A) more cookies.
B) fewer cookies.
C) more hot chocolate.
D) an equal amount of cookies and hot chocolate.
Ques. 4The table above lists the market shares of the twenty makers of personal computers. Based upon the Herfindahl-Hirschman Index
A) the industry is an oligopoly.
B) the industry is a monopoly.
C) the industry is competitive.
D) the firms in the industry will not be allowed to merge.
Ques. 5The figure above shows a perfectly competitive firm. The firm is operating; that is, the firm has not shut down. The firm is
A) making an economic profit of 200.
B) incurring a economic loss of 200.
C) incurring an economic loss of 600.
D) making zero economic profit.
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