If the marginal rate of substitution of butter and margarine is constant, the indifference curve is likely to be _____
a. linear
b. concave from below
c. L-shaped
d. U-shaped
a
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Everything else equal, the AC curve will shift when
A. the price of the product rises. B. technological change raises the MPP of one input. C. output rises. D. increasing returns to scale are present.
Assuming that wheat and corn can both be grown on the same type of land, a decrease in the price of corn, other things being equal, will cause a(n):
a. downward movement along the supply curve for wheat. b. upward movement along the supply curve for wheat. c. rightward shift in the supply curve for wheat. d. leftward shift in the supply curve for wheat.
Suppose that Arnold spends all his income on bratwursts and piano lessons and his marginal utility per dollar on bratwursts is lower than that on piano lessons. Is Arnold maximizing his utility? Why or why not?
What will be an ideal response?
What is meant by increasing returns to scale?
What will be an ideal response?