The indifference curves for perfect substitutes are straight lines
a. True
b. False
Indicate whether the statement is true or false
True
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If insurance companies are able to gather more and better information on their customers, this will
A) help reduce the problem of adverse selection but do nothing to help with the problem of moral hazard. B) help reduce the problem of moral hazard but do nothing to help with the problem of adverse selection. C) help reduce the problems of adverse selection and moral hazard. D) do nothing to help with the problems of moral hazard and adverse selection.
Assume Joe is only willing to pay $5 for a Ferrari sports car
A) Joe is not considered part of the demand for Ferraris. B) Joe won't be sold a Ferrari. C) Joe is not considered rational. D) Joe's willingness to pay is not indicative of how much he values the Ferrari.
As long as market price remains above the average total cost, and the firm chooses the profit-maximizing level of output, it will:
A. make profits. B. earn zero profits. C. make a loss. D. Any of these is possible.
If decreasing long-run average cost is inherent in an industry's technology, then only one supplier can satisfy the entire market
Indicate whether the statement is true or false