At consumer equilibrium income is allocated to purchases so that the ratio of marginal utility to price is equal for different goods
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to the above figure. In the absence of a subsidy,
A) Qd would be demanded and QM would be supplied. B) the price Pd would be charged and quantity QM demanded. C) the quantity Qo and price Po would prevail in the market. D) None of the above is correct.
Legal limits on prices will tend to cause misallocation of resources because
a. production (or opportunity) cost no longer corresponds to market price. b. people are unable to determine their preferences at the high or low price. c. producers no longer have incentive to be profitable. d. consumers no longer have incentive to spend their income efficiently. e. All of the above are correct.
Demand deposits are: a. accounts in which one cannot write a check directly but from which the individual can easily withdraw money. b. the coins and bills that circulate in an economy
c. purchased from a bank or financial company, signed, and then redeemed with an additional signature when one wants to spend them. d. deposits in banks that are available upon making a cash withdrawal or writing a check.
An example of a government policy to increase human capital formation is:
A. government support for basic research. B. the provision of publicly-funded education. C. the construction of an interstate highway system. D. maintaining a well-functioning legal system.