For a consumer to maximize utility, he will choose
A. the point where the slope of the budget line equals the slope of the indifference curve.
B. any point where the budget line and indifference curve intersect.
C. the point where he gets the most of the good he prefers most.
D. the point where the marginal rate of substitution is greatest.
E. the point where marginal utility is zero for both goods.
Answer: A
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Devaluation of a country's currency is likely to
a. raise the prices of imported goods b. reduce the prices of exported goods c. shift resources into production of exported goods d. raise all prices e. all of the above
Oligopolies can result from any of the following EXCEPT
A) economies of scale. B) vertical mergers. C) government regulation. D) diseconomies of scale.
The percent of population that experiences transient poverty at some point in their lives is:
A. more than 25 percent. B. less than 10 percent. C. approximately 12 percent. D. approximately 40 percent.
A firm's average cost increases as it increases its output by expanding its plant and hiring additional workers (its only inputs to production). The firm's owner blames the increase in per-unit costs on the law of diminishing marginal productivity. The owner's reasoning is:
A. incorrect because all inputs are varied in the example. B. correct because some inputs are fixed in the long run. C. correct because marginal productivity must decrease in the short run. D. incorrect because economies of scale are present.