The assertion that "There is no free lunch" means that
all production involves the use of scarce resources and thus the sacrifice of alternative goods.
Any combination of goods lying outside of the budget line
is unattainable, given the consumer's income.
Which of the following is one of the Five Fundamental Questions?
What goods and services will be produced?
In a competitive economy prices:
influence consumers in their purchases of goods and services.
influence businesses in their purchases of economic resources.
influence workers in making occupational choices.
. The market system's answer to the fundamental question "How will the goods and services be produced?" is essentially
"At least-cost production."
When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes:
the income effect.
If two goods are complements:
a decrease in the price of one will increase the demand for the other.
If consumers are willing to pay a higher price than previously for each level of output, we can say that, the following has occurred:
An increase in demand
Suppose that as the price of Y falls from $2.00 to $1.90 the quantity of Y demanded increases from 110 to 118. Then the price elasticity of demand.
If the demand for product X is inelastic, a 4 percent increase in the price of X will
If a firm can sell 3,000 units of product t $10 per unit and 5,000 at $8, then:
The price elasticity of demand is 2.25
The ILLinois central railroad once asked the ILLinois commerce commission for permission to increase its commuter rates by 20 percent. The railroad argues that declining revenues made this rate increase essential. Opponents of the rate increase contented that the railroads revenues would fall because of the rate hike. It can be concluded that
The railroad felt that the demand for passenger service was inelastic and opponents of the rate increase felt it was elastic
The first Pepsi yields Craig 18 units and the second yields him and additional 12 units of utility. His ttal utility from three pepsis is 28 units of utility. The marginal utility of the third pepsi is
8 units of utility
The theory of consumer behavior assumes that
Consumers behave rationally, maximizing their satisfactions
If a consumer chooses a combination of goods that lies inside of her budget line, the consumer
could obtain more goods with her money income