Microeconomics

If income increases due to a decrease in taxes, then A) utility will

If income increases due to a decrease in taxes, then A) utility will increase because consumers can afford a larger bundle of goods. B) utility will fall because consumers will be forced to buy a smaller bundle of goods. C) utility will remain constant. D) utility will increase because consumers will be forced to buy […]

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Date: September 9th, 2020

Data shows that United States college students purchase more e-books t

Data shows that United States college students purchase more e-books than German college students. Assuming that all students have identical preferences for e-books and textbooks, what is the likely explanation for this result? A) Taxes on textbooks are higher in the United States than taxes on textbooks in Germany. B) Taxes on textbooks are lower […]

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Date: September 9th, 2020

Suppose a taco costs $4 and a burrito costs $2. Moreover, this Mexican

Suppose a taco costs $4 and a burrito costs $2. Moreover, this Mexican restaurant has a special deal. After you’ve bought 6 burritos, you can buy each extra burrito for $1.50. Assume that tacos are on the vertical axis and burritos on the horizontal axis. What is the marginal rate of transformation (MRT) when 8 […]

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Date: September 9th, 2020