Excluding corner solutions, in consumer equilibrium, which of the following is true?
A. The consumer is minimizing utility given the constraints.
B. The indifference curve is steeper than the budget constraint.
C. The consumer can improve his/her situation by consuming more of both goods.
D. The marginal rate of substitution equals the slope of the budget constraint.
Answer: D
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The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain?
A) 16 cars per ton of grain B) 6 cars per ton of grain C) 3 cars per ton of grain D) 2 cars per ton of grain
Regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected __________ doesn’t change.
a. market b. economy c. production d. firm
Suppose that Venezuela experiences significant capital outflows after a recent election. If the nation had fixed exchange rates, what effect would these flows have had on Venezuela's reserves account and value of the Bolivar (the Venezuelan currency)?
a. Reserves account would rise and value of the Bolivar would not change. b. Reserves account would not change and value of the Bolivar would fall. c. Reserves account would fall and value of the Bolivar would not change. d. Reserves account would fall and value of the Bolivar would fall. e. Reserves account would fall and value of the Bolivar would rise.
In 2005–2006, the Fed increased interest rates in an attempt to halt inflation. What was the most likely effect of raising interest rates on velocity?
A. Velocity will decrease. B. Velocity will increase. C. Velocity will remain constant. D. Velocity is unrelated to saving accounts.