The slope of an indifference curve reveals:
A) that preferences are complete.
B) the marginal rate of substitution of one good for another good.
C) the ratio of market prices.
D) that preferences are transitive.
E) none of the above
B
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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.
The number of CDs purchased increased by 50 percent when consumer income increased by 10 percent. Assuming other factors are held constant, CDs would be classified as:
a. social goods. b. normal goods. c. Giffen goods. d. inferior goods.
M2 + ___________ = M3.
Fill in the blank(s) with the appropriate word(s).
Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. Hi Phi Unlimited's total revenue from installing 15 sound systems is $30,000 and its total revenue from installing 18 sound systems is $33,000. The marginal revenue received from selling the 18th sound system is
A. equal to the price of the 16th sound system. B. greater than the price of the 16th sound system. C. less than the price of the 16th sound system. D. Indeterminate from the given information.