If two consumption points are not on the same indifference curve, then one point is ________
A) a substitute for the other point
B) unaffordable and the other is affordable
C) preferred to the other
D) more expensive than the other
C
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Suppose the AC curve is U-shaped. Then an increase in a recurring fixed cost will cause the AC curve to shift up, with its lowest point shifting to the right.
Answer the following statement true (T) or false (F)
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1, what changes in the market would result in an economically efficient output?
A) The price would increase, the quantity supplied would increase, and the quantity demanded would decrease. B) The price would increase, quantity demanded would increase, and quantity supplied would decrease. C) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. D) The price would increase, the demand would increase, and the supply would decrease.
In reference to short-term economic fluctuations, the "trough" refers to:
A. the low point of economic activity prior to a downturn. B. the low point of economic activity prior to a recovery. C. a period in which the economy is growing at a rate significantly below normal. D. a particularly strong and protracted recession.
Suppose Tim's Cowboy boot factory produces in a perfectly competitive market. Suppose the average total cost of cowboy boots is $65, the average variable cost of cowboy boots is $60, and the price of cowboy boots is $62. If the firm is producing the level of output where marginal cost equals price, then in the short run the firm:
A. should shut down. B. should continue to produce since total revenue exceeds total variable cost. C. is earning a positive economic profit. D. can increase profit by increasing output.