The marginal rate of substitution is the
a. quantity of a good a consumer receives for $1 payment
b. income a consumer gives up to acquire one unit of the good
c. ratio of the prices of two goods
d. rate at which the consumer is willing to trade one good for another good
e. relative quantity of a good that two consumers trade
D
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Which of the following best describes the difference between a demand curve and a demand schedule?
A) A demand curve shows different quantities of a good demanded at different prices, whereas a demand schedule shows different quantities of a good demanded at different incomes. B) A demand curve can be derived from a demand schedule, but a demand schedule cannot be derived from a demand curve. C) A demand curve shows different quantities of a good demanded at different incomes, whereas a demand schedule shows different quantities of a good demanded at different prices. D) A demand curve is a graphical representation of the relationship between the quantity of a good and its price, whereas a demand schedule is a tabular representation.
The money multiplier works best if all transactions in the economy are made through the banking system
a. True b. False Indicate whether the statement is true or false
The price effect of a price decrease by a monopolist refers to:
A) the loss in revenue due to the price reduction. B) the increase in sales due to the price reduction. C) the increase in revenue because of an increase in sales. D) the decrease in the demand for labor due to the lower price of the final product.
Carefully define the following terms, and explain their importance in economics
a. opportunity cost b. abstraction c. theory d. model e. marginal analysis