Basket of goods A is on an indifference curve that lies closer to the origin than basket B. From this we know that
A) the prices of the goods in A are less than the prices of the goods in B.
B) the satisfaction from consuming A is more than the satisfaction from consuming B.
C) the marginal utility from consuming A is less than the marginal utility from consuming B.
D) the satisfaction from consuming A is less than the satisfaction from consuming B.
Answer: D
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The difference between the economy's potential output and its actual output relative to its potential output at a point in time is called the:
A. output gap. B. trade deficit. C. budget deficit. D. full-employment rate.
Consider the indifference maps shown above. If X and Y are perfect substitutes, your indifference curves between them would look like those in
A) Figure A. B) Figure B. C) Figure C. D) Figure D.
Keynesians and monetarists share the belief that
a. recessions are caused by falls in aggregate demand. b. the demand for money is stable. c. excess demand is a chronic problem in modern economies. d. the Federal Reserve is responsible for most recessions. e. stabilization policy is beneficial.
Managers should do more of an activity if it adds more to revenue than it adds to cost
Indicate whether the statement is true or false