What are the properties of indifference curves?
What will be an ideal response?
| a. | Every point on an indifference curve farther from the origin than another indifference curve is preferable to points on the curve closer to the origin. |
| b. | Indifference curves never intersect. |
| c. | Indifference curves are negatively sloped. |
| d. | Indifference curves are generally “bowed in” (convex) toward the origin. |
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Consider two economies: A and B that are completely similar, except their savings rate. The savings rate in economy A is greater than the savings rate in economy B. Which of the following statements is true?
A) Capital accumulation will be faster in economy B in comparison to economy A. B) Capital accumulation will be faster in economy A in comparison to economy B. C) Rate of capital accumulation will be the same in both economies. D) Growth rate in country B is likely to be higher than the growth rate of country A in the long-run.
What would be a way for the Federal Reserve to stimulate a sluggish economy?
A) buy government bonds on the open market B) encourage the stock market C) print more money D) sell more government bonds
In the figure above, moving from production at point d to production at point a requires
A) technological change. B) a decrease in unemployment. C) decreasing the output of consumer goods in order to boost the output of capital goods. D) both capital accumulation and a decrease in unemployment.
A new cattle feed has been found to increase the amount of milk each cow produces. Which of these is a likely impact in the market for milk, if this cattle feed is used by most of the dairies?
a. A rightward shift of the supply curve for milk b. An increase in the demand for milk c. A decrease in the quantity demanded of milk d. A leftward shift of the supply curve for milk e. An increase in the price of milk