Explain the assumption of free disposal as it applies to indifference curve analysis
What will be an ideal response?
In indifference curve analysis we are restricted to goods that yield positive marginal utility, or,more simply, that "more is better." One way to justify this assumption is to say that when more of something makes you worse off, you can simply throw it away at no cost.
You might also like to view...
Monopolistic competition differs from perfect competition only in the number of firms participating in the market.
Answer the following statement true (T) or false (F)
When considering the demand for money curve, the interest rate
A) is the price of holding money. B) varies negatively with the transactions demand for money. C) will have a positive relationship with the quantity of money demanded. D) is independent of the opportunity cost of money.
Why are the losers from free international trade not fully compensated for their losses?
A) The amount of compensation needed would bankrupt the government. B) The losers are foreigners. C) The people who claim to lose are also the same ones who benefit. D) No one actually loses from international trade. E) Identifying all losers and the size of their losses is extremely difficult.
Refer to the figure above. This is an example of a(n) ________
A) zero-sum game B) prisoners' dilemma C) extensive-form game D) payoff matrix