The intercept of a budget line measures the
a. amount of a good that a consumer will purchase
b. maximum amount of a good that a consumer could purchase, given his consumption of some other good
c. maximum amount of a good that could be consumed at given prices and income
d. minimum amount of a good that could be consumed at given prices and income
e. minimum consumption of a good consistent with utility maximization
C
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"Inflation acts as a tax because the government gains purchasing power." Is the previous statement correct or incorrect?
What will be an ideal response?
The production possibilities frontier is the boundary between those combination of goods and services that can be
A) produced and those that can be consumed. B) consumed domestically and those that can be consumed by foreigners. C) produced and those that cannot be produced. D) consumed and those that cannot be produced.
Which of the following situations can lead to a winner's curse?
a. A bid which is won by multiple bidders but fails to cover the expectations of the seller. b. A win which makes a player over-enthusiastic about further gambles. c. An overoptimistic bid which helps the bidder to win but fails to cover his costs. d. A win which makes the player risk-averse toward future gambles.
Understanding the potential for tradeoffs between ________ is an important consideration when designing poverty policy.
A. the rich and the poor B. the old and the young C. equity and efficiency D. All of these are true.