The point where the indifference curve is tangent to the budget line
A) is the best affordable point.
B) is where the marginal rate of substitution exceeds the relative price by as much as possible.
C) is a point on consumer's demand curve.
D) All of the above answers are correct.
A
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It is easy for one financial institution to reduce its leverage by acting alone, but when many financial institutions try to do the same thing at once, asset prices fall rapidly and bank capital declines for all such institutions
a. True b. False.
Tax cuts proposed by the Kennedy and Reagan administrations were followed by robust economic growth
a. True b. False Indicate whether the statement is true or false
The price of a foodstuff falls and the total revenue (received by farmers for selling the foodstuff) rises. What could explain this?
A) Increased supply and elastic demand. B) Real income rises and the foodstuff is an inferior good. C) Real income rises and the foodstuff is a normal good. D) Increased supply and inelastic demand. E) none of the above
If countries do not engage in international trade:
A) they give up the ability to specialize in production. B) worldwide levels of production are lower. C) the world will be operating inside its production possibilities curve. D) all of the above are true.