Figure 3-14
Refer to . The gasoline market was initially in equilibrium at point e. Other things constant, an increase in the popularity and use of Sport Utility Vehicles (SUVs) that consume more gasoline per mile driven than most other types of cars would likely move the equilibrium in this market toward point
a.
r.
b.
s.
c.
t.
d.
u.
c
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Max has allocated $100 toward meats for his barbecue. His budget line and indifference map are shown in the above figure. If Max is currently at point e,
A) the absolute value of his MRS is less than the trade-off offered by the market. B) he is willing to give up more burger than he has to, given market prices. C) he is not maximizing his utility. D) All of the above.
A new government study reveals that daily consumption of peanut butter increases life expectancy by 10 years. What will this do to the input markets for peanuts and peanut butter factory workers? Assuming bologna is a substitute for peanut butter, what will happen in the market for bologna factory workers?