If your marginal rate of substitution between two goods diminishes continuously as you give up one good for the other, that means the
A) price per unit of one good declines when you buy it in larger and larger quantities.
B) two goods are perfect substitutes.
C) two goods are perfect complements.
D) two goods are neither perfect substitutes nor perfect complements.
D
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A value of the absolute price elasticity of demand equal to 0.25 indicates that
A. a 1% decrease in price leads to a 2.5% increase in quantity demanded. B. a 10% decrease in price leads to a 25% increase in quantity demanded. C. a 10% decrease in price leads to a 2.5% increase in quantity demanded. D. a 0.25% decrease in price leads to a 1% increase in quantity.
Which of the following is not an argument used by economists and policymakers who are in favor of moving toward greater government involvement in health care?
A) The increased competition that results from market-based reforms would reduce health care costs and increase economic efficiency. B) A single-payer system would reduce the paperwork caused by the current system. C) The current Medicare system has had lower administrative costs than have private health insurance companies. D) The systems in most other high-income countries have lower levels of health care spending per person which still providing good health outcomes.