The above figure shows Jane's budget line and two of her indifference curves. Jane's marginal rate of substitution is
A) the rate at which she would give up a lobster dinner for a steak dinner and consider herself just as well off.
B) equal to the ratio of the price of a steak dinner to the price of a lobster dinner when she is at her best affordable point.
C) equal to 2 lobster dinners per steak dinner at her best affordable point.
D) Both answers A and B are correct.
D
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If the quantity supplied and the price change by the same percentage, then supply is
A) elastic. B) inelastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic.
According to opportunity-cost theory, the cost to an airline of letting its employees fly at no charge
A) depends upon the alternatives available to the employees. B) is greater around the Christmas holidays. C) is zero. D) will depend upon the value employees place upon travel.
Using the data in the table above, with y measured on the vertical axis, the slope of the line relating y to x is
A) 1/3. B) 1. C) 3. D) 6.
A straight-line demand curve has an elasticity that becomes smaller as we move from left to right along the schedule.
Answer the following statement true (T) or false (F)