Liane maximizes her total utility when she allocates all of her available income such that the marginal utility per dollar spent on each good ________
A) is diminishing
B) is maximized
C) is the same
D) is increasing
C
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What does it mean for a person or nation to have a comparative advantage in producing a product?
What will be an ideal response?
Which of the following is correct?
a. Consumer surplus refers to a situation in which there are more buyers than sellers in a market. b. Producer surplus refers to a situation in which there are more sellers than buyers in a market. c. Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity. d. All of the above are correct.
Starting from short-run equilibrium, the following occurs: personal income taxes are cut, business taxes are cut, and labor productivity rises. What is the effect on the price level and Real GDP in the short run?
A) Real GDP rises and the price level necessarily falls. B) Real GDP rises and the price level necessarily rises. C) Real GDP falls and the price level necessarily remains the same. D) Real GDP rises and the effect on the price level cannot be determined. E) Real GDP rises and the price level necessarily remains the same.
Consider an industry that is in long-run equilibrium. An increase in demand leads to a decrease in the price of the good. We know that this is
A) a decreasing-cost industry. B) a constant cost industry. C) an increasing-cost industry. D) not a competitive industry.