Which of the following have to be true about functions in the duality picture:
A. The expenditure function is homogeneous of degree 1 in prices.
B. The compensated demand functions are homogeneous of degree 1 in prices.
C. The uncompensated demand functions are homogeneous of degree 1 in prices.
D. Both (a) and (b).
E. Both (b) and (c).
F. Both (a) and (c).
G. All of the above.
H. None of the above.
Answer: A
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Which of the following statements is correct?
i. The demand curve shows the maximum price people are willing to pay for a given quantity of the good. ii. The maximum price a consumer is willing to pay for an additional unit is the marginal benefit of that unit. iii. Value is what a consumer receives and price is what a consumer pays. A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
When positive economic profits exist in an industry:
A) the market price of the good produced by the industry is less than the average total cost of the industry. B) resources flow from less productive uses to that particular industry. C) there is an exit of firms from the industry. D) the market price of the good produced by the industry is less than the marginal cost faced by the industry.
Given the table above, the present value of lifetime resources ________ when the real interest rate rises to five percent
A) falls by $367 B) rises by $200 C) rises by $300 D) falls by $275
A normal good is defined by economists to be a good:
a. with a negatively-sloped demand curve. b. that is purchased by at least 75 percent of the population. c. that is bought by consumers with normal tastes. d. whose demand increases when incomes increase. e. whose demand decreases when incomes increase.