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7 Cards in this Set
- Front
- Back
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Suppose you can write generic supply and demand curves such that QS = A + BP and QD = D + CP. If price mustreach a certain level before firms supply anything, A must be
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Negative |
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Suppose you can write generic supply and demand curves such that QS = A + BP and QD = D + CP. If consumersdemand less as price rises, C must be
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negative |
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If the price of X falls, the budget constraint
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rotates outward about the Y-intercept.
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Suppose a cup of coffee at the campus coffee shop is $2.50 and a cup of hot tea is $1.25. Suppose a student'sbeverage budget is $20 per week. If you were going to write an algebraic expression of this budget line of theform Coffee = A + BTea. B would be\
a. 16b. 2c. -2d. -1/2 |
-1/2 |
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If people like their goods in fixed proportions, the two goods are
a. perfect substitutes b. perfect complements c. complements (but not perfect) d. substitutes (but not perfect) |
perfect complement
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Suppose a teenager has $20 and likes both rap music (R) and country music (C) with a set of preferences so that U= C1/2R1/2. Suppose that the iTunes price of a rap music song is PR = 2 and the price of a country music song is PC= 1. What is the greatest level of affordable utility?
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square root of 50 |
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Lily is a college student who likes to buy only two goods: Cheetos and Pepsi. To determine Lily's budget line,you need to know
I. Lily's preferences for Cheetos and Pepsi. II. the prices of Cheetos and Pepsi. III. Lily's income. |
II and III
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