An indifference curve shows various combinations of two factors of production that give the same level of output per unit of time
a. True
b. False
Indicate whether the statement is true or false
False
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If government spending rises but the central bank changes the money supply to prevent income from changing, then
a. both consumption and investment will remain unchanged. b. consumption rises and investment falls. c. investment falls but consumption rises. d. both consumption and investment rises.
A pecuniary externality _____
a. affects the prices facing the third parties on which the externality falls b. affects the products bought by third parties c. affects the production functions of third parties d. affects the production functions of producers of the externalities
When estimating a demand function for a good where quantity demanded is a linear function of the price, you should
A) not include an intercept because the price of the good is never zero. B) use a one-sided alternative hypothesis to check the influence of price on quantity. C) use a two-sided alternative hypothesis to check the influence of price on quantity. D) reject the idea that price determines demand unless the coefficient is at least 1.96.
This graph below shows a consumer facing a choice between a cash gift and merchandise of greater value. 
Show, using a sketch graph, why a consumer prefers a cash gift rather than a larger gift of merchandise.
What will be an ideal response?