Isoquants that are downward-sloping straight lines exhibit
A) an increasing marginal rate of technical substitution.
B) a decreasing marginal rate of technical substitution.
C) a constant marginal rate of technical substitution.
D) a marginal rate of technical substitution that cannot be determined.
C
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In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does not inflate its costs, then consumer surplus will be
A) $192 million. B) $108 million. C) $216 million. D) $60 million.
In a typical college classroom without a seating chart, dozens of students nevertheless occupy classroom seats with a minimum of confusion and disorder. Economics explains the orderly process of seat selection by assuming students
A) engage in entirely random decisions, from which only divine intervention can generate order in the classroom. B) follow a simple, perhaps even unwritten, rule, such as "seats belong to the person who first occupies them." C) know all the consequences of their actions, and thus purposefully create an orderly classroom seating assignment even if the professor doesn't require one. D) trick question: economics cannot deduce any sensible scientific claims about the behavior of college students.
You are a lobbyist hired by a less developed country to try to prevent a developed country from increasing trade barriers against labor-intensive manufactured imports such as textiles
Make your case, arguing from both developed and developing country perspectives, in terms of who gains and who loses.
Compared to higher-income families, low-income families would demand proportionately more of which of the following kinds of goods?
a. Luxury goods. b. Substitute goods. c. Normal goods. d. Inferior goods.