Refer to Figure 7.1. Suppose that instead of $350, Angus earns only $250 by playing the bagpipes, but all other earnings remain the same. If there is no ordinance against loud music, property rights belong to
A) Angus.
B) Dudley.
C) no one.
D) both Angus and Dudley.
A
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What is the marginal rate of substitution?
A) the rate at which the consumer is willing to trade one good for another without any loss in utility B) the rate at which the consumer is willing to trade one good for another so that she increases her utility C) the price ratio D) the rate at which the consumer must give up one good to purchase an additional unit of the other goods in the market
Define the following terms. Give a complete and precise definition in one sentence
a. total utility b. marginal utility c. consumer's surplus d. "law" of demand
A bank might make mortgages to people in different regions of the country. By doing so
a. the bank reduces the risk it faces from falling house prices in its region and falling prices in all regions. b. the bank reduces the risk it faces of falling house prices in its region but not from falling prices in all regions. c. the bank reduces the risk it faces of falling house prices in all regions, but not the risk it faces from falling house prices in its regions. d. the bank reduces neither the risk it faces from falling house prices in its region nor falling prices in all regions.
Judging from the production possibilities curve, the production of 5 units of housing and 20 units of food would be _____.
a. efficient
b. presently unattainable
c. inefficient
d. a sign of growth