The above figure depicts the Edgeworth box for two individuals, Al and Bruce. The contract curve can be found by connecting points
A) a and b.
B) a and c.
C) b and d.
D) c and d.
D
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If real estate prices are expected to drop, all else equal, the demand for bonds ________ and the interest rate_______
A) increases; rises B) increases; falls C) decreases; rises D) decreases; falls
In the figure below, the value of insurance is $7,000.
A. True
B. False
C. Uncertain
Suppose the equilibrium price and quantity of ketchup fall. The most likely explanation for these changes is:
A. an increase in the demand for ketchup. B. a decrease in the supply of ketchup. C. a decrease in the demand for ketchup. D. an increase in the supply of ketchup.
Suppose that for George the marginal benefit per dollar spent on tuna is less than the marginal benefit per dollar spent on ham. The consumer can always increase his utility by buying:
A. more tuna and less ham. B. less tuna and more ham. C. more of both goods. D. The consumer is already maximizing utility.