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Is buying the house a good deal for the tenant? Where does opportunity cost enter the picture?
Most American businesses are small, but most of the output is produced by large businesses. What is the role of government in a mixed economy?
Which are the two biggest national economies on earth? Why are they so much bigger than the others?
Suppose that strawberries sell for $3 per basket. Jim is considering to buy zero, one, two, three, or four baskets. Calculate how many baskets Jim would buy.
If the farm is now privately owned, how does the market guide the decisions that used to be made by the central planning agency?
Describe the trade-offs that were involved. What were the opportunity costs of the decisions that were actually made?
What shapes would you expect for demand curves for the following: A medicine that means life or death for a patient.
Would you do so more often if a rental cost half as much? Discuss the likely effects of the following: Rent ceilings on the market for apartments.
Use two diagrams, one for the milk market and one for the meat market, to illustrate how this policy should have affected the price of meat.
The same rightward shift of the demand curve may produce a very small or a very large increase in quantity. Explain this conclusion with diagrams.
In 1981, when regulations were holding the price of natural gas below its free-market level. Evaluate the congressman's statement.
From 1990 to 1997 in the United States, number of working men grew by 6.7 percent. Which of the following two explanations seems more consistent with the data?
At which level do you get greater marginal utility: 14 gallons per day or 22 gallons per day? Why? Which are likely to be inferior goods?
If marginal revenue product of a gallon of oil used as input by a firm is $2.20 and price of oil is $2.07 per gallon, what can firm do to increase its profits?
Explain why elasticity of demand is measured in percentages. Explain why the elasticity of demand formula normally eliminates minus signs.
If the price elasticity of demand for gasoline is 0.3 and the current price is $3.20 per gallon, what rise in the price of gasoline will reduce its consumption?
What variables other than price and advertising are likely to affect the quantity demanded of a product?
Draw some hypothetical indifference curves for John Q. Public on a diagram identical to the one you constructed for Test Yourself Question 1.
What inferior goods do you purchase? Why do you buy them? Do you think you will continue to buy them when your income is higher?
Rather, they say, consumer would be better off quitting while ahead or buying a quantity such that marginal utility. Explain what is wrong with this argument?
A rise in the price of a certain commodity from $20 to $25 reduces quantity demanded from 25,000 to 10,000 units. Calculate the price elasticity of demand.
What is likely to happen to the marginal physical product of feed? What, therefore, is role of input proportions in determination of marginal physical product?
Does the farmer minimize costs by hiring nine workers and renting 10 acres of land? If not, which input should he use in larger relative quantity?
Which do you think will be lower, the short-run or the long-run average cost of the increased output?
In this same diagram, sketch a production indifference curve indicating that CCC can produce no more than 1,000 containers with this expenditure.