The indifference map
A) shows that the consumer is indifferent among all consumption bundles.
B) is an individual indifference curve.
C) captures the same information as the utility function.
D) is impossible to derive from the utility function.
C
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A 20 percent increase in the wage rate induces firms in an industry to reduce quantity demanded for labor by 5 percent in the first year. Five years later we would expect, other things constant,
A) the reduction in the quantity demanded of labor to be much greater than 5 percent. B) the reduction in the quantity demanded of labor to be less than 5 percent. C) the reduction in the quantity demanded of labor to be about 5 percent. D) the quantity demanded of labor to be back to its original level.
An indication that Insurance companies anticipate adverse selection is
a. they do not require a deductible b. they do not classify clients into different risk types according to their claim history c. they classify clients into different risk types according to pre-existing conditions d. they do not require a co-payment
Suppose that Mick and Cher are the only two members of society and are willing to pay $10 and $8, respectively, for the third unit of a public good. Also, assume that the marginal cost of the third unit is $17. We can conclude that:
A. the third unit should not be produced. B. the third unit should be produced. C. zero units should be produced. D. 4 units should be produced.
A point on a total variable cost curve shows the ________ variable cost a firm will bear to produce a certain output.
A. change in B. average C. lowest D. highest