What is the marginal rate of substitution between two goods and how is it related to the indifference curve?
What will be an ideal response?
The marginal rate of substitution between two goods is the change in the quantity of one good that just offsets a one-unit change in the consumption of another good, so that total satisfaction between the two goods remains constant. The marginal rate of substitution is reflected by the slope of the indifference curve between the two goods.
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What are the major economic effects of rent ceilings?
What will be an ideal response?
The practice of "monetizing the debt" is traditionally feared because it is thought to cause
A) unemployment. B) inflation. C) a falling price level. D) a liquidity trap.
In the long run, the representative firm in monopolistic competition tends to have:
A. excess capacity. B. a perfectly elastic demand curve. C. economic profits. D. limited product differentiation.
Refer to the information provided in Figure 1.7 below to answer the question(s) that follow.
Figure 1.7Refer to Figure 1.7. The slope of the line between Points D and B is
A. 1.5. B. 0.67. C. -0.67. D. -1.5.