A consumer maximizes satisfaction at the point where his valuation of good X, measured as the amount of good Y he would willingly give up to obtain an additional unit of X, equals:
A) the magnitude of the slope of the indifference curve through that point.
B) one over the magnitude of the slope of the indifference curve through that point.
C) Px/Py
D) Py/Px
C
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The income-expenditure identity for a closed economy is:
A. Y = C + I + G. B. Im ? Ex = C + I. C. Y = C + I + G + NX. D. Y + G = C + I ? NX.
What do economists consider the “language” of the market system?
a. cash incentives b. market prices c. sales promotions d. credit cards
The Keynesian view of the world is that the
A. self-correcting mechanism is unreliable. B. benefits of fighting unemployment are high and the costs are low. C. short-run Phillips curve is relatively flat. D. All of these responses are correct.
Refer to the graph shown. With an effective price floor at $8, total surplus is reduced by:
A. 45. B. 100. C. 90. D. 25.