A consumer satisfies the condition ________ when her indifference curve is just tangent to her budget constraint.
A. TUx = TUy
B. TUx/Px = TUy/Py
C. MUx/Px = MUy/Py
D. MUx = MUy
Answer: C
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A collusive agreement to form a cartel is difficult to maintain because
A) each member firm can increase its own profits by cutting its price and selling more. B) forming a cartel is legal but frowned upon throughout the world. C) supply will decrease because of the high cartel price. D) demanders will rebel once they realize a cartel has been formed. E) each firm can increase its profit if it decreases its production even more than the decrease set by the cartel.
The above table shows the distribution of wealth and income in Miseria. With respect to income, the richest twenty percent of the population earn
A) 90 percent of the income. B) 11 times as much as the poorest twenty percent. C) 9 times as much as the poorest twenty percent. D) just as much as the second richest twenty percent.
In Figure 17-3 above, suppose we are working under the assumption of the Lucas model. The Fed has been following an announced policy of "zero money growth for an indefinite period
" Suddenly and without warning it produces positive money growth and a "money surprise." This would result in a movement between points A) A and C. B) A and B. C) D and B. D) D and A. E) A and D.
Natural monopolies have all of the following characteristics except
a. relatively high fixed cost b. relatively low average variable cost c. low levels of production d. difficulty for new firms to enter e. only one firm can produce profitably