The change in the consumption of one good that just offsets a one-unit change in the consumption of another good is the
A. marginal rate of satisfaction.
B. marginal utility.
C. marginal rate of consumption.
D. marginal rate of substitution.
Answer: D
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Explain the difference between the words "value," "price," and "cost."
What will be an ideal response?
Robert Lucas spurred the rational expectations revolution in ________
A) the 1960s B) the 1970s C) the 2000s D) the 1880s
Which of these is an argument for using the potential compensation criterion?
a. If the winners can compensate the losers, no one is harmed by employing the criterion. b. The criterion does not employ interpersonal utility calculations. c. If employed over a large number of policy changes, everyone should enjoy a net gain in the long run. d. It is easy to determine the magnitude of the wins and losses.
In the 1990s, the Danish government passed laws tightening eligibility requirements for receiving unemployment benefits. What happened in Denmark as a result of this policy change?
a. The size of the labor force declined b. The unemployment rate decreased c. More teenagers entered the labor force d. The wage rate increased e. The natural rate of unemployment increased