The best example of decision-making at the margin would be
What will be an ideal response?
observing the effect that a small change in income has on the amount of income tax owed and therefore upon after-tax income
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A quasi-public good is similar to a public good in that one person's consumption of the quasi-public good does not reduce the amount available for everyone else
Indicate whether the statement is true or false
On a graph with consumption on the vertical axis and disposable income on the horizontal axis, the slope of the line is
a. greater than one. b. equal to one. c. less than one. d. undefined.
Suppose Joe's MRS for cookies with crackers is 6 crackers per cookie. Also assume that Mary's MRS for cookies with crackers is 3 crackers per cookie. Assuming that these rates of substitution don't depend on the amounts consumed, which of the following trades would make both Joe and Mary better off?
A. Joe gives Mary 5 crackers in exchange for a cookie. B. Joe gives Mary 2 crackers in exchange for a cookie. C. Joe gives Mary 6 crackers in exchange for a cookie. D. There is not enough information to answer the question.
Utility is:
A. revealed by observing choices an individual makes. B. the satisfaction individuals get from different bundles of goods. C. maximized by rational individuals. D. All of these are true.