A consumer's budget set:
A. is the set of all affordable combinations of two goods.
B. includes only combinations of two goods that leave the consumer with leftover money.
C. includes only combinations of two goods that exhaust the budget.
D. Both is the set of all affordable combinations of two goods and includes only combinations of two goods that exhaust the budget are correct answers.
Answer: A
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One of the tendencies that is common among firms regulated using rate of return regulation is to
A) increase production to an inefficient level. B) inflate the costs of production. C) incur an economic loss. D) understate the costs of production. E) overstate their total revenue.
In the figure above, the poorest 40 percent of households receive ________ of total income
A) 20 percent B) 10 percent C) 30 percent D) 15 percent
What are economies of scale and diseconomies of scale? How do they arise? What do they imply for the shape of the LRAC curve?
What will be an ideal response?
Which of the following is true concerning the income effect of a decrease in price?
A) It will lead to an increase in consumption only for a normal good. B) It always will lead to an increase in consumption. C) It will lead to an increase in consumption only for an inferior good. D) It will lead to an increase in consumption only for a Giffen good.