An assumption underlying indifference curve analysis is that MUx/MUy ________ as more of X and less of Y is consumed.
A. increases
B. remains constant
C. decreases
D. always equals one
Answer: C
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In the long run ________
A) the amount of output an economy can produce is determined by real variables like capital, labor and technological advances B) aggregate supply is fixed at the potential level of output C) there is enough time for prices to fully adjust so the classical dichotomy holds D) all of the above E) none of the above
In the long run, the price for a perfectly competitive firm
A) will be determined by the firm's supply and demand curves. B) will allow for positive economic profits. C) will equal marginal cost where marginal cost is at a minimum. D) will equal the minimum average total cost.
Someone who values a lottery at less than the expected value is
a. a risk lover b. risk neutral c. risk averse d. one who tends to play lots of lotteries
The following data show levels of planned variables for an economy. I g = Investment; S a = Saving after taxes; G = Government spending; T = Taxation; X = Exports; M = Imports. What is the equilibrium level of domestic output?
A. Choice A
B. Choice B
C. Choice C
D. Choice D