Josh went to watch a movie, but decided to leave halfway and went for a walk to the nearby park. Which of the following is most likely to be true in this case?
a. The price of the movie ticket represents a sunk cost
b. The opportunity cost of going for the walk is higher than the opportunity cost of watching the movie.
c. Josh's marginal utility from walking increases as he walks more.
d. Josh's marginal utility from watching another movie is the same as his marginal utility from walking another mile.
a
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An important reason why Ricardian equivalence may fail is if
A) borrowing and lending are done through intermediaries. B) government debt incurred today may not be paid off until after some current consumers are deceased. C) state and local governments also engage in debt finance. D) some consumers are borrowers, while other consumers are lenders.
The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, social welfare equals
A) A. B) A + B + C. C) A + B + C + D + E. D) zero.