Explain the difference between the marginal rate of substitution and the marginal rate of transformation
What will be an ideal response?
The marginal rate of substitution is a consumer's willingness to trade one good for another based on utility. The marginal rate of transformation is the consumer's ability to trade one good for another based on prices.
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If only one player in a game has a dominant strategy, there can be no Nash equilibrium
Indicate whether the statement is true or false
The figure above shows the market for the chemical hydrogen sulfide, the production of which creates an external cost. The government imposes the pollution tax shown in the above figure. What quantity is produced after the pollution tax is imposed?
A) zero pounds B) 80 million pounds C) 160 million pounds D) more than 160 million pounds E) more than 80 million pounds and less than 160 million pounds
Per capita real GDP is a questionable indicator of the state of the economy because it does not account for:
a. growth of national income. b. changes in inflation. c. income distribution. d. changes in the size of the population. e. changes in the level of output.
In the short run, which of the following is the most likely effect of an anticipated move to a more expansionary monetary policy?
What will be an ideal response?