The consumer's objective is to minimize the utility generated by a fixed budget.
Answer the following statement true (T) or false (F)
False
You might also like to view...
What can we predict about the effect on consumption of an increase in government spending?
A. Consumption will increase by the amount of the government spending. B. Consumption will increase by an amount equal to the MPC times the change in real GDP. C. Consumption will not rise as government spending rises. D. Consumption will increase by an amount equal to the MPC times the change in government spending.
The figure above represents the relationship between output and cost in an industry with an external cost. Which line represents the marginal private cost (MC) curve?
A) Curve 1 B) Curve 2 C) the dotted line BC D) the y-axis E) the dotted line AB
Consider the market for opticians. What is likely to happen to the equilibrium wage and quantity of opticians if more and more people turn to laser eye surgery instead of wearing glasses or contact lens?
A) The equilibrium wage falls and the equilibrium quantity of opticians rises. B) The equilibrium wage and the equilibrium quantity of opticians rise. C) The equilibrium wage and the equilibrium quantity of opticians fall. D) The equilibrium wage rises and the equilibrium quantity of opticians falls.
A farmer notices that a neighboring rancher's cattle are wandering and destroying some of his crops. The farmer decides to offer a payment to the rancher if the rancher will reduce the size of his herd. By doing so, the farmer
A) can be sure that the size of the herd will be reduced and the size of his own harvest will be increased. B) indicates to the rancher that there is an opportunity cost to the wandering of the cattle, and thereby internalizes the externality. C) inadvertently bears the costs of the externality when the rancher should be liable for the costs. D) informs the rancher that the cattle have destroyed crops, which should induce the farmer to build a fence in order to maintain good relations.