In the Edgeworth Box, we can set one price to 1 and only need to solve for the other price because only relative prices matter for individual choice when income is drawn from endowments.
Answer the following statement true (T) or false (F)
True
Rationale: This is similar to saying demand functions are homogeneous in prices when income is drawn from an endowment.
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The potential for redistribution cannot be exaggerated
Indicate whether the statement is true or false
Based on the above information, at what price does the firm consider shutting-down?
a. $25 b. $0 c. $15 d. $10
If a fair game is played many times the monetary losses or gains will:
a. approach zero. b. be negative. c. be positive. d. result in an outcome that cannot be determined without more information.
Which of the following observations is true?
a. Increase in taxes shifts the consumption schedule upward. b. Tax reductions increase equilibrium GDP. c. Taxes reduce total spending directly. d. Taxes do not have a multiplier effect on equilibrium GDP.