An optimizing consumer will select a consumption bundle in which
a. income is maximized, and prices are minimized.
b. utility is maximized, and prices are minimized.
c. utility is maximized, subject to budget constraints.
d. utility is maximized, and indifference curves are linear.
c
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An increase in the price level shifts the aggregate planned expenditure curve downward and results in a movement along the aggregate demand curve
Why does an increase in the price level result in a shift in the aggregate planned expenditure curve rather than a movement along it?
When the price of pizzle trees increased by 20 percent last year, consumers ended up spending 10 percent more on the purchase of pizzle trees. This shows that the demand for pizzle trees
A) was elastic. B) was inelastic. C) was unit elastic. D) did not obey the law of demand.
When the United States imports goods from the rest of the world, which of the following parties is harmed?
i. domestic producers of the good ii. domestic consumers of the good iii. foreign producers of the good A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
In a two-person bargaining situation it is
A) always in the best interests of both players for each player to be as flexible as possible, and to have as many options as possible. B) always in the best interest of the player that moves first to be as flexible as possible, and to have as many options as possible. C) often in the best interest of players to pretend a game is noncooperative when it is not, and vice versa. D) often in the best interest of players to cut off some of their own options in order to make the other player's threats not credible. E) often in the best interest of players to cut off some of their own options in order to make their own threats credible.