Higher indifference curves are preferred to lower ones as long as the
a. marginal rate of substitution is diminishing.
b. products in the bundle are "bads" and not "goods.".
c. products in the bundle are "goods" and not "bads.".
d. budget constraint does not shift.
c
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Suppose the value of the CPI is 1.100 in year one, 1.210 in year two, and 1.331 in year three. Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three. The price level is increasing, the inflation rate is ________, and the relative price of computers is ________.
A. increasing; increasing B. constant; decreasing C. increasing; decreasing D. constant; increasing
If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ___________________.
a. excess supply b. excess demand c. ceteris paribus d. a price ceiling
The increase in living standards of American workers over the past century is primarily due to
a. the success of labor unions. b. minimum-wage laws. c. improvements in productivity. d. None of the above are correct.
Assume that the relative prices of capital and labor have not changed. As a firm's expenditures for capital and labor decrease, its isocost line
A. shifts in parallel to the original isocost line. B. shifts out parallel to the original isocost line. C. rotates outward on the X-intercept. D. rotates outward on the Y-intercept.