Explain why most indifference curves are convex
What will be an ideal response?
Diminishing marginal rates of substitution make most indifference curves convex. When people have a lot of one good, they are willing to give up a relatively larger amount of it to get a good of which they have relatively little.
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Suppose that workers decrease their taste for leisure, and thus require less time away from work. What is likely to happen to wages and the quantity of labor hired?
A) wages increase, quantity of labor hired decreases B) wages increase, quantity of labor hired increases C) wages decrease, quantity of labor hired decreases D) wages decrease, quantity of labor hired increases
A firm uses workers and seed to grow lettuce. Its lettuce output rises from 100 tons to 200 tons when the number of workers increases from 25 to 75. Its production process shows
A. decreasing returns to scale. B. diminishing returns to labor. C. increasing long-run average cost. D. decreasing short-run average variable cost.
Classical economists believed that the economy automatically moves toward equilibrium at full employment
a. True b. False Indicate whether the statement is true or false
The production possibilities curve for the nation of Economania shifts to the right. This could have been caused by:
A. a decrease in Economania's capital stock. B. technological innovation in the production of Economania goods. C. high unemployment in Economania the previous time period. D. Economania producing all consumer goods in the previous period.