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The revenues earned by the firm from the consumer may be maximized under
Correct answer(s):
- The buy one get one free offer
The firm manager with horizontal indifference curves (output on the horizontal axis, profit on the vertical axis) views
Correct answer(s):
- Only profits to be "goods."
A firm manager with vertical indifference curves (output on the horizontal axis, profit on the vertical axis) views
Correct answer(s):
- Only output to be "goods."
The firm manager with indifference curves which are convex from the origin (output on the horizontal axis and profit on the vertical axis) views
Correct answer(s):
- Both profits and outputs to be "goods."
Suppose a worker is offered a wage of $8 per hour, plus a fixed payment of $100 per day, and he can use 24 hours per day. What is the equation for the worker’s opportunity set? (E is total earnings and L is leisure)
Correct answer(s):
- E = 292 - 8L
Suppose a worker is offered a wage of $8 per hour, plus a fixed payment of $100 per day, and he can use 24 hours per day. What is the market rate of substitution between leisure and income?
Correct answer(s):
- $8
Suppose a worker is offered a wage of $8 per hour, plus a fixed payment of $100 per day, and he can use 24 hours per day. What is the minimum the worker can earn in a day?
Correct answer(s):
- $100
Suppose a worker is offered a wage of $8 per hour, plus a fixed payment of $100 per day, and he can use 24 hours per day. What are the maximum total earnings the worker can earn in a day?
Correct answer(s):
- $292
If a firm offers to pay a worker $10 for each hour of leisure the worker gives up the $10 implies the
Correct answer(s):
- Market rate of substitution between leisure and income
If a firm offers to pay a worker $10 for each hour of leisure the worker gives up then the opportunities confronting the worker will be given by the
Correct answer(s):
- Straight line with a negative slope
Most workers view leisure and income as
Correct answer(s):
- Goods
Running a supermarket involves
Correct answer(s):
- A lower level of risk than running a gourmet shop
If you include in your offerings some inferior goods, the demand for these products will increase
Correct answer(s):
- During bad economic times
Many gourmet shops go out of business during recessions since they sell almost exclusively
Correct answer(s):
- Normal goods
When the price of a good increases with other things unchanged, the real income of the consumer
Correct answer(s):
- Decreases
The substitution effect reflects how a consumer will react to a different
Correct answer(s):
- Market rate of substitution
If you sell an inferior good, offering to sell gift certificates to those looking for a gift may result in
Correct answer(s):
- A greater quantity sold than if the customer resorts to giving a cash gift
If a consumer is given a $10 gift certificate, good for items in store X and all items in store X are inferior goods, then consumer desires to consume
Correct answer(s):
- Less goods in store X
If a consumer is given a $10 gift certificate, good only for items in store X and all items in store X are normal goods, then the consumer desires to consume
Correct answer(s):
- More goods in store X
Which is more preferred between a cash gift and an in-kind gift?
Correct answer(s):
- A cash gift