If ATC is falling, then MC must be:
a) rising.
b) below ATC.
c) equal to ATC
d) above ATC.
e) falling.
Ans: b) below ATC.
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Which of the following are true about functions in the duality picture:
A. Compensated demand functions are homogeneous of degree zero in prices. B. Uncompensated demand functions are homogeneous of degree zero. C. Expenditure functions are homogeneous of degree zero. 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.
Income accrues to people who supply productive services, which means services that
A) add to the monetary income of the society. B) are in demand. C) contribute to social welfare. D) result in tangible or durable products. E) supply basic wants.
The table above shows the total utility from the two goods Freddy likes to consume. The marginal utility Freddy receives from consuming an extra bag of Fritos
A) depends on the quantity of fruit drinks consumed. B) decreases as he consumes more bags of Fritos. C) decreases as he consumes more fruit drinks. D) equals 75 when he consumes 2 bags of Fritos.
An individual who is only willing to pay a relatively low amount for a particular good
A) would fall in the upper portion of the demand curve. B) would fall in the middle portion of the demand curve. C) would fall in the lower portion of the demand curve. D) would not be considered part of the demand curve.