The budget line shows:
A. the amount of product A that a consumer is willing to give up to obtain one more unit of
product B.
B. all possible combinations of two goods that can be purchased, given money income and
the prices of the goods.
C. the minimum amount of two goods that a consumer can purchase with a specific money
income.
D. all possible combinations of two goods that yield the same level of utility to the consumer.
Answer: B
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Economic efficiency requires that a natural monopoly's price be set corresponding to the quantity where marginal revenue equals marginal cost
Indicate whether the statement is true or false
The most important source of foreign exchange earnings to offset the colonial deficit with England was
a. insurance charges and merchant commissions. b. the sale of ships. c. the sale of colonial shipping services. d. inflows of sterling from British forces stationed in the colonies.
The Haig-Simons definition of income includes
A. employer pension contributions and insurance purchases. B. transfer payments. C. income in-kind. D. all of these answer options are correct.
Opportunity cost is
A) the intrinsic value of an economic good. B) the total value of all the alternatives given up when a choice is made. C) the value of the opportunity selected when a need is satisfied. D) the value of the next highest ranked alternative that must be sacrificed to obtain a want.