What two conditions are met when a consumer is maximizing utility?
What will be an ideal response?
The two conditions that must be met to ensure that a consumer is maximizing his or her utility are: i) all available income is spent, and ii) the marginal utility per dollar spent is equal for all goods and services consumed.
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The BP curve is upward sloping if assets are perfectly substitutable
Indicate whether the statement is true or false
If the Gini coefficient in the economy decreases from .40 to .32, this indicates
a. greater income equality b. greater income inequality c. the economy is poorer d. the economy is richer e. none of the above can be determined from this information
The CPI is a measure of the overall cost of
a. the inputs purchased by a typical producer. b. the goods and services purchased by a typical consumer. c. the goods and services produced in the economy. d. the stocks on the New York Stock Exchange.
In a market with barriers to entry:
A. the implications of Adam Smith's theory of the invisible hand can be expected to hold. B. prices will direct productive resources toward underserved markets. C. firms will earn zero economic profit in the long run. D. economic profit will not fall to zero in the long run.