The marginal rate of substitution is measured along
A. a given budget line.
B. a given indifference curve.
C. the total utility curve.
D. the demand curve.
Answer: B
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Because of an expected rise in interest rates in the future, a banker will likely
A) make long-term rather than short-term loans. B) buy short-term rather than long-term bonds. C) buy long-term rather than short-term bonds. D) make either short or long-term loans; expectations of future interest rates are irrelevant.
If the consumption function is given by C = 200 + 0.6YD, then an increase in taxes of 50 units will cause the IS schedule to
a. shift to the right by 75 units.. b. shift to the left by 50 units. c. shift to the left by 75 units. d. shift to the left by 125.
The more bowed out the Lorenz curve, the
A) less equal the income distribution. B) more equal the income distribution. C) greater the overall wealth in the economy. D) less the overall wealth in the economy.
In the long run, more costs become fixed
a. True b. False Indicate whether the statement is true or false