Beginning at the horizontal axis intercept, as a consumer moves upward along the budget line, he will find that
a. the marginal utility per dollar spent on the vertical axis good increases
b. the marginal utility per dollar spent on the horizontal axis good increases
c. the marginal utility per dollar spent on the horizontal axis good decreases
d. the marginal utilities per dollar spent on both goods increase
e. the marginal utilities per dollar spent on both goods remain constant along that particular budget line
B
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Based on Figure 6.1, how much revenue will the government raise from a $0.25 per bushel tariff on soybean imports?
A) The government will raise $2.5 million. B) The government will raise $5 million. C) The government will raise $15 million. D) The government will raise $32.5 million. E) The government will see no increase in income; because the country is small, foreign firms will simply not serve it after the tariff is imposed.
Cal has a choice between two gambles. The first gamble offers a 50 percent chance of winning $20 and a 50 percent chance of losing $20. The second gamble offers a 20 percent chance of winning $100 and an 80% chance of losing $20. Which choice has the higher expected value?
A. The expected value of both gambles is the same, but Cal would prefer the first gamble since the chances of winning are higher. B. The expected value of the first gamble is higher. C. The expected value of the second gamble is higher. D. The expected value of both gambles is the same, so Cal would be indifferent between the two.
In countries such as El Salvador or Ghana, tax revenue is extremely limited due to the lack of an adequate tax-collection agency. These countries most likely will issue bonds and sell them to the central bank in order to cover government expenditures. Thus, the lack of:
A. well-developed bond markets may lead these economies to inflation and poor economic performance. B. a banking system may lead these economies to inflation and poor economic performance. C. government intervention may lead these economies to inflation and poor economic performance. D. property rights and laws may lead these economies to inflation and poor economic performance.
An increase in the demand for orthodontic services leads to
A) an increase in the supply of orthodontists. B) a rise in the rates of dental insurance. C) lower prices for orthodontic care. D) an increase in the demand for orthodontists.