Which of the following statements regarding preferences and indifference curves is true?
A. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle on the lower indifference curve.
B. A consumer is indifferent between two consumption bundles that are on the same indifference curve.
C. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the right on an indifference curve.
D. When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the left on an indifference curve.
B. A consumer is indifferent between two consumption bundles that are on the same indifference curve.
You might also like to view...
The Congressional Budget Office projects that Social Security spending will rise from 5% of GDP to 6% over the next four decades. Why is that a problem?
What will be an ideal response?
Sally leaves her $24,000 secretarial position with a company and invests her savings of $15,000 (on which she was earning 6 percent interest) in her own Ready Sec agency. After expenses, her net income was $28,900. Her economic profit was
A. $4,900. B. $4,000. C. $28,900. D. ?$10,100.
We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will decrease when
A) supply increases and demand decreases B) supply decreases and demand increases. C) supply and demand for a product simultaneously decrease. D) supply and demand for a product simultaneously increase.
When something of value has no price attached to it,
a. externalities will be present. b. production of the product has no cost. c. government should not intervene to produce the product. d. private companies will eventually produce the product, and the good will no longer be free.