An indifference curve shows
A) the relationship between prices and a household's budget.
B) all possible prices and preferences for a good.
C) combinations of goods among which a household is indifferent.
D) budget lines among which a consumer is indifferent.
C
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Economists who favor policy activism argue that the United States economy is NOT always in equilibrium because
A) wage and price rigidities exist. B) the markets are over regulated. C) the Federal Reserve's monetary policy is too restrictive. D) the national debt is too large.
The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?
A) 6 tons of grain and 18 cars B) 4 tons of grain and 26 cars C) 2 tons of grain and 27 cars D) 7 tons of grain and 10 cars
Suppose demand increases and supply decreases. Which of the following will happen?
a. Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease. b. Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase. c. Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase. d. Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease. e. The change in equilibrium price and quantity cannot be determined.
If the current equilibrium output level is above the full-employment output level, the Fed should consider
A. selling government securities, raising the discount rate, and raising the required reserve ratio. B. selling government securities, lowering the discount rate, and raising the required reserve ratio. C. buying government securities, lowering the discount rate, and raising the required reserve ratio. D. buying government securities, raising the discount rate, and raising the required reserve ratio.