1. Laws that require car drivers to put their seat belts are an example of
price ceiling
a. pigouvian subsidy
b. environmental standard
c. deadweight loss
2. You go to an all-you-can-eat buffet. The marginal utility of the last bite that you eat will be:
a. dependent on how much you like the buffet
b. zero
c. equal to the price of the buffet
d. very negative
3. Suppose the price of Starbucks' coffe increases from $2.5 to $3.0 and, as a result, the monthly demand of Starbucks' coffe Big Macs in Madrid decreases from 20,000 to 18,000 daily units. Using the midpoint method, the price elasticity of demand for Starbucks' coffe is close to:
a. -1.7
b. -3.5
c. -0.6
d. -0.5