In the one-period model, what do we assume about household preferences?
A) Households prefer more to less.
B) Households like money.
C) Households dislike taxes.
D) Households care about others.
A
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Bill is working as the only employee at a local store. The relation between Bill and the owner of the store is such that Bill is ________ and the owner is ________
A) the agent; the principal B) both principal and agent; neither a principal nor an agent C) neither a principal nor an agent; both principal and agent D) the principal; the agent
Rent controls and the minimum wage are both examples of price ceilings
Indicate whether the statement is true or false
To the extent that brand names developed in monopolistic competition provide a benefit to the consumer, it is:
a. by allowing for a lower total cost. b. through their assurance that the firm will provide a quality product in order to preserve repeated transactions. c. by encouraging the entry of new competitors. d. by allowing the firm to engage in price discrimination.
Answer the following questions true (T) or false (F)
1. The tangency between and iso-cost line and an isoquant represents the least cost combination of two inputs. 2. The iso-revenue line reflects the rate at which the market is willing to substitute between two products as their prices change. 3. The production possibilities curve reflects the different products the business can produce given efficient use of its existing resources.