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Assuming no government involvement in this market, if the current price were at the level of 0A, we would expect
If the market is initially in equilibrium, which of the following would create a new equilibrium at point H?
If the price were to rise from 0B to 0C,
4. Every day Melanie spends her lunch money consuming apples, at $1 each, and oranges, at $2 each. At her current level of consumption, Melanie's marginal utility of apples is 12 and her marginal utility of oranges is 18. If she has already spent all of her lunch money, how should Melanie change her consumption decision to maximize utility?
5. When the production or consumption of a good creates a positive externality, it is deemed a market failure because at the market quantity
6. Which of the following would best complete a short definition of economics? "Economics is the study of . . ."
7. Suppose the price elasticity of demand for cigarettes is less than one. When an excise tax is imposed on cigarette production, it changes the price, quantity, and consumer spending in which of the following ways?
PRICE QUANTITY SPENDING
8. Which of the following is true of a price floor?
9. You are told that the income elasticity for DVDs is + 1.5. This means that
10. Which of the following causes the supply curve of paper to shift to the left?
Using the diagram above, which of the following might have caused the outward movement of the production possibility frontier?
12. Suppose the county government sends each parent a coupon that can be used to subsidize the cost of sending each child to daycare. What would you expect to occur in the market for daycare services?