An indifference curve
A) connects a set of consumption bundles among which the consumer is indifferent.
B) is only useful in analyzing apathetic consumers.
C) connects a set of consumers who each have the same preferences.
D) is only useful in microeconomics.
A
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Of the following, who would most likely be hurt by an unanticipated increase in the rate of inflation?
a. an individual with a 30-year fixed-rate home mortgage loan b. the U.S. federal government because it has a large quantity of outstanding debt c. lenders who have made long-term loans at fixed interest rates d. Social Security recipients whose benefits are adjusted upward as the general level of prices increases
Consumer surplus is represented graphically under the demand curve and below the equilibrium price.
Answer the following statement true (T) or false (F)
Which statement is true?
A. The perfect competitor sets her price. B. Perfect competitors sell below market price to attract new customers. C. In the long run the perfect competitor produces at an output at which ATC is falling. D. The perfect competitor makes zero economic profit in the long run.
You have been hired by the No Hassle Collection Agency to provide economic advice. The owner of the agency tells you that No Hassle's only variable input is the number of collection agents. The hourly wage for collection agents is $40.00. The marginal revenue product curve for collection agents reaches its maximum at five workers with a marginal revenue product of $34.00. What advice would you give this firm?
A. Increase the wage rate paid to collection agents so that their marginal revenue product will increase. B. Hire five collection agents so as to minimize the amount of money the firm will lose. C. Produce as much as possible so as to maximize the difference between the wage paid to collection agents and their marginal revenue product. D. Shut down immediately, as the firm is not able to cover all of its variable costs.