Which of the following is the strongest criticism of the model of the rational consumer maximizing marginal utility per price within the constraints of a budget?
a. It is difficult for consumers to know the exact utility of the products they are buying.
b. It is difficult for consumers to know the exact price of the products they are buying.
c. It is difficult for consumers to accurately calculate the budget they have available to spend.
d. It is difficult for consumers to accurately calculate the demand for the products they are buying.
a. It is difficult for consumers to know the exact utility of the products they are buying.
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Would the housing industry be characterized as an increasing, decreasing or a constant-cost industry? Explain your position
What will be an ideal response?
Market exchange assumes that _____
a. there are no monopolies b. prisoner dilemmas are nonexistent c. parties to the exchange have well-defined property rights d. the public sector is failing its job
Other things being equal, the monopolist will
A) hire more workers than if the industry were perfectly competitive. B) hire the same number of workers as a perfectly competitive industry would. C) hire fewer workers than if the industry were perfectly competitive. D) have lower profits than if the industry were perfectly competitive.
If there is just one producer in an industry where the average total cost curve declines throughout the output range up to where it intersects the industry demand curve: a. the industry will be a natural monopoly
b. charging a price equal to marginal cost would entail economic losses for the producer. c. charging a price equal to average cost would entail a welfare cost. d. All of the above would be true.