The slope of the contract curve for two consumers is determined by the
A. relative prices of goods.
B. marginal rates of substitution of the two trades.
C. income of the two traders.
D. absolute prices of goods.
Answer: B
You might also like to view...
Recall the Application. One difference between a value-added tax and an income tax is the value-added tax
A) is a progressive tax. B) is not a consumption tax. C) does not penalize individuals who save. D) is difficult to collect.
When the price level falls, the total quantities of goods and services demanded:
A. decrease. B. stay the same. C. increase. D. increases and then decreases.
Bucky and Satchel are offered identical jobs, each paying $80,000 per year. According to behavioral economics:
A. they should feel equally good about the job offer. B. how each will feel about the job offer will depend on their current positions and incomes. C. if Bucky's current income is $60,000 per year, and Satchel's is $70,000 per year, we would expect Bucky to receive twice as much additional utility from taking the job as Satchel would. D. if the jobs will not change their income, they are more likely to switch jobs than remain with the status quo.
Refer to the graph below. At equilibrium, the total revenues received by sellers would be represented by the area:
The equilibrium point in the market is where S and D curve intersect.
A. b
B. b + c
C. a + b
D. b + c + d