Which of the following is an example of a forward linkage?
a. A government spending program reduces the nation's level of unemployment.
b. A compact disc industry creates a demand for CD players.
c. The development of a shoe industry creates a demand for a leather industry.
d. An increase in the population increases the demand for food.
e. New educational facilities improve the literacy rate of the population.
B
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In the above figure, Reggie's budget line rotates outward from BL1 to BL2. He initially consumes at point A. If his new consumption bundle is at point B, this implies that kiwi fruit and mangoes are
A) both lower in price. B) both inferior goods. C) neither substitutes nor complements. D) None of the above answers is correct.
There are only two people in the world (Adam and Eve) and only one good (apples). Adam has four apples and a total utility in money terms from apple consumption of $16; Eve has four apples and a total utility from apple consumption of $20 . Which of the following statements must be true?
a. Eve's marginal utility from consuming her fourth apple must be greater than Adam's marginal utility from consuming his fourth apple. b. The total utility of society will rise if Adam gives Eve one apple. c. If Adam and Eve each always has a positive marginal utility from consuming apples, the total utility of society can only be increased by an increase in the total number of apples available for consumption. d. Adam's average utility from consuming apples is greater than Eve's average utility from consuming apples.