Refer to Figure 3.2. Which assumption concerning preferences do Alvin's indifference curves violate?
A) Diminishing marginal rates of substitution
B) Transitivity of preferences
C) More is preferred to less
D) Completeness
E) both A and C
E
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Which of the following happens when a Pigouvian subsidy is provided?
A) The marginal social cost curve shifts upward. B) The marginal private cost curve shifts downward. C) The marginal social benefit curve shifts downward. D) The marginal private benefit curve shifts upward.
A major shortcoming of a barter economy is
A) the requirement of specialization and exchange. B) that money loses value over time from inflation. C) the requirement of a double coincidence of wants. D) that most goods and services cannot be traded.
If the capital-labor ratio equals 1.5 in the steady state, depreciation equals 20, and dilution equals 10, investment per worker equals
A) 15. B) 20. C) 30. D) 45.
Which of the following is less sensitive to interest rate changes?
A. Utility industries. B. State and local finances. C. The residential housing market. D. Food and other household items.