Two isoquants, which represent different output levels but are derived from the same production function, cannot cross because
A) isoquants represent different utility levels
B) this would violate a technical efficiency condition
C) isoquants are downward sloping
D) additional inputs will not be used by profit maximizing firms if those inputs decrease output
E) Both B and D are true.
E
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The United Company competes with many other firms each producing slightly different products. Firms freely enter and exit this industry. The type of industry United Company operates in is
A) a monopoly. B) monopolistic competition. C) oligopoly. D) perfect competition. E) oligopolistic monopoly.
A change in expectations in the new classical model
a. shifts the aggregate supply curve. b. must reflect a change in the anticipated changes in the economy. c. shifts the aggregate demand curve. d. both a and b. e. none of the above.
A decrease in the price of ice cream is likely to cause:
A. an increase in the demand for ice cream cones due to a change in the price of a complementary good. B. an increase in the demand for ice cream cones due to a change in the price of a substitute good. C. an increase in the demand for ice cream cones due to a change in the preferences of consumers. D. a decrease in the demand for ice cream cones due to a change in the price of a related good.
As one moves downward on an indifference curve, the:
a. total utility from the consumption of a good decreases. b. total utility from the consumption of a good increases. c. the total satisfaction from consumption remains the same. d. the marginal utility from the consumption of a good increases. e. the total satisfaction from consumption decreases.