Answer the following statement true (T) or false (F)
1) Indifference curves are linear and budget lines are convex to the origin.
2) Graphically, the consumer maximizes total utility where the budget line is tangent to an
indifference curve.
3) In drawing a particular budget line, money income and the prices of the two products are
fixed.
4) With a fixed money income, an increase in the price of one good and a decrease in the price
of the other will cause the new budget line to intersect the original budget line.
5) In moving northeasterly from the origin, we encounter indifference curves that reflect higher
and higher levels of total utility.
1) F
2) T
3) T
4) T
5) T
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Monopolistic competition is defined as a type of market structure where
A) many firms produce the good. B) firms produce a homogeneous good. C) there are barriers to entry. D) firms can earn positive profit in the long run.
If productivity growth accelerates, but workers do not realize it ________
A) they will expect large wage hikes B) they will not expect large wage hikes C) the natural rate of unemployment will rise D) the number of discouraged workers will rise
If the opportunity cost of money is zero, the expected value of future dollars is equal to their present value.
Answer the following statement true (T) or false (F)
Economic analysis indicates that high tax rates will
What will be an ideal response?