Indifference curves cannot ever be concave for two goods
Indicate whether the statement is true or false
False. While indifference curves are typically convex, they can be concave. This means, however, that the MRS of y for x increases as x increases. That is, the consumer places greater value on the next x the more x she has. The interpretation is that a consumer with concave indifference curves prefers to specialize in either x or y but not have a mix of both.
You might also like to view...
The output gap is the
A) difference in graduation levels between high school and college. B) difference between actual inflation and core inflation. C) percentage deviation of real GDP from potential GDP. D) percentage increase in the growth rate of real GDP. E) percentage increase in the growth rate of real GDP minus the unemployment rate.
Provide an example of each type of externality that is different from the ones described above
What will be an ideal response?
Using the standard 45-degree line diagram, how does a decrease in investment spending effect the expenditure schedule?
a. It increases the slope of the expenditure schedule. b. It decreases the slope of the expenditure schedule. c. It shifts the expenditure schedule downward. d. It shifts the expenditure schedule upward.
In the standard unemployment rate, discouraged workers are counted as:
A. part of the labor force. B. employed. C. unemployed. D. part of the population over 16.