The first step in economic analysis is to
a. explore how the equilibrium changes if the constraints change.
b. make explicit assumptions about the desirability and the cost of various alternatives.
c. apply the equimarginal principle to the problem being considered.
d. determine how agents' constraints are interrelated.
b. make explicit assumptions about the desirability and the cost of various alternatives.
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The collapse of the Bretton Woods system marked
A) the end of floating exchange rates and a move to fixed exchange rates. B) marked the end of fixed exchange rates and a move to floating exchange rates. C) the beginning of the gold standard. D) a plunge in the price of gold. E) the elimination of paper currencies.
Mikey is very picky and insists that his mom make his breakfast with equal parts of cereal and apple juice — any other combination and it ends up on the floor. Cereal costs 4 cents per tablespoon and apple juice costs 6 cents per tablespoon
If Mikey's mom budgets $8 per month for Mikey's breakfast, how much cereal and juice does she buy? A) 40 tablespoons each of cereal and juice B) 80 tablespoons each of cereal and juice C) 40 tablespoons of cereal and 75 tablespoons of juice D) 100 tablespoons of cereal and 67 tablespoons of juice
Higher indifference curves are preferred to lower ones as long as the
a. marginal rate of substitution is diminishing. b. products in the bundle are "bads" and not "goods.". c. products in the bundle are "goods" and not "bads.". d. budget constraint does not shift.
The price of Y is $10.According to the above figure, the marginal rate of substitution of X for Y at point C is:
A. 0.3 B. 5 C. 0.5 D. 2 E. none of the above