Which of the following is NOT true about indifference curves?
A) Indifference curves slope downward.
B) Indifference curves show equally preferred combinations of two goods.
C) Indifference curves are not straight lines because the marginal rate of substitution falls.
D) Indifference curves shift when prices change.
Answer: D
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There are a few firms in the automobile industry in Poorland. In order to prevent a price war, these firms have secretly agreed to charge a price 20% above the marginal cost of production. This is an example of ________
A) free riding B) undercutting C) collusion D) cost-cutting
Market equilibrium rates of interest are rarely expected to approximate efficient interest rates between willing transactors of exchange
Indicate whether the statement is true or false
Suppose a profit-maximizing firm in a perfectly competitive market is collecting $1,999 in total revenues. If the total cost of its fixed factors of production falls from $500 to $400, the firm will:
A. lower its price. B. earn smaller profits or larger losses. C. expand its output. D. earn greater profits or smaller losses.
Social demand equals market demand plus externalities when there are positive external benefits.
Answer the following statement true (T) or false (F)