Suppose that 2 units of X and 8 units of Y give a consumer the same satisfaction as 4 units of X and 2 units of Y. Then
A. the marginal rate of substitution of Y for X is 3.
B. the consumer is willing to give up 1 unit of Y to obtain 3 more units of X.
C. the consumer is willing to give up 3 units of Y to obtain 1 more unit of X.
D. both a and c
E. both b and c
Answer: D
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The aggregate demand curve:
a. would be little affected by a technological advancement. b. shifts to the right when spending decreases. c. shifts to the left when there is a decrease in taxes. d. cannot move independently of the aggregate supply curve. e. shifts to the right when there is an expectation that future income will fall.
Adam Smith's invisible hand is now called
A. Opportunity cost. B. Laissez faire. C. The market mechanism. D. Economic growth.
Which of the following tends to occur when the unemployment rate increases?
A) a reduction in the labor force participation rate B) a reduction in the number of discouraged workers C) an increase in the number of employed workers D) all of the above E) none of the above
In a natural monopoly, throughout the range of market demand
A) the marginal cost is above average total cost and pulls average total cost upward. B) average total cost is above the marginal cost and pulls the marginal cost upward. C) the marginal cost is below average total cost and pulls average total cost downward. D) there are diseconomies of scale.