Answer the following statement(s) true (T) or false (F)
1. If the consumer chooses not to purchase potatoes, then the marginal value of potatoes must be less than or equal to the relative price of potatoes.
2. The steeper the indifference curve, the greater the marginal value of a good.
3. If a person is willing to trade one good for another, their new basket after the trade must lie on a lower indifference curve than their original basket.
4. Along a convex indifference curve, the marginal value of a good rises as the quantity of the good rises.
5. When using the composite good convention all other goods are measured in terms of dollars.
1. True
2. True
3. False
4. False
5. True
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Refer to Figure 11.5. A decrease in the level of investment is best illustrated by diagram
A) A. B) B. C) C. D) D.
When people are deciding whether to deposit money in a bank:
A. everyone will respond exactly the same to any given interest rate. B. some people will require a higher interest rate to deposit the same amount of money. C. people don’t accurately account for the risk of losing savings. D. they will deposit the same amount in response to any given interest rate.
Convergence is a pattern in which:
a. low-income and middle-income economies grow faster than those of high-income countries. b. high-income economies grow faster than those of low-income and middle-income countries. c. Western economies grow faster than Eastern economies. d. Eastern economies grow faster than Western economies.
The price of good B has a pattern such that P = $20 on Monday through Thursday of every week, and P = $25 on Fridays. If speculators begin participating in the market for good B, their actions will likely lead to a(n) ______________ in the price of good B on Monday through Thursday and a(n) _______________ in the price of good B on Friday
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease