Refer to the above table. The table gives the various combinations of Good A and Good B along Jane's indifference curve. The marginal rate of substitution when Jane goes from combination C to combination D is
A. 4:1.
B. 3:1.
C. 2:1.
D. 0.
Answer: C
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The endowment point is the consumption bundle in which
A) first-period consumption is equal to zero. B) second-period consumption is equal to zero. C) the consumer finds the most utility. D) consumption is equal to disposable income in each period.
If consumers receive an increase in income of $1,000 . their spending will increase by a smaller amount
a. True b. False Indicate whether the statement is true or false
Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 table is
a. 1/6 chair for Ken and 1/3 chair for Traci. b. 1/6 chair for Ken and 3 chairs for Traci. c. 6 chairs for Ken and 1/3 chair for Traci. d. 6 chairs for Ken and 3 chairs for Traci.
Each of the following is likely to be a successful way for the government to solve the problem of overuse of a common resource except
a. regulating the use or consumption of the common resource. b. taxing the use or consumption of the common resource. c. selling the common resource to a private entity. d. asking individuals to voluntarily reduce their use of the resource.