Suppose that George goes to his favorite ice cream store and buys three single -dip cones, the first for three dollars, the second for two dollars, and the third for one dollar, but enjoys no consumer surplus from the experience. We know that George must
a. have paid the same price for each cone
b. have been cheated by the ice cream store-owner
c. not like ice cream very much
d. have paid prices for the cones that correspond to points on his demand curve
e. not have maximized total utility that day
d. have paid prices for the cones that correspond to points on his demand curve
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In the principal-agent relationship, the principal is
A) the person who is placed in control over resources that are not his own and agrees to compensate the resource owner in the event of outcomes that do not satisfy the resource owner. B) the person who places his resources in professional hands in exchange for the professional's promise to act on the resource owner's behalf. C) the owner of a resource that has hired a third party to act in the best interest of that third party. D) the person who is placed in control over resources that are not his own, with a contractual obligation to use these resources in the interests of some other party.
Assume that there were decreasing opportunity costs of production in an island economy that only produced two goods. What would the shape of the production possibilities frontier look like and why?
What will be an ideal response?
Between 1960 and 1995, Social Security benefits:
A. increased, which increased the poverty rate among the elderly. B. decreased, helping reduce the poverty rate among the elderly. C. increased, helping reduce the poverty rate among the elderly. D. decreased, which increased the poverty rate among the elderly.
When all the factors of aggregate expenditure are influenced by income, the multiplier is no longer solely a function of the marginal propensity of consumption
a. True b. False Indicate whether the statement is true or false