Explain the following statement: Individuals with different tastes might have the same tastes at the margin at their current consumption bundles.
What will be an ideal response?
By different tastes, we mean different maps of indifference curves. So, to say that individuals have different tastes is the same as saying that different individuals have different indifference maps. But it may well be the case that individuals have chosen bundles at which their marginal rates of substitution are the same --- which implies that their tastes are the same at the margin even though they differ overall.
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Income distribution in the United States is quite similar to that in other industrialized nations
Indicate whether the statement is true or false
The principle of comparative advantage does not provide answers to certain questions. One of those questions is
a. Do specialization and trade benefit more than one party to a trade? b. Is it absolute advantage or comparative advantage that really matters? c. How are the gains from trade shared among the parties to a trade? d. Is it possible for specialization and trade to increase total output of traded goods?
The study of health care provision in Delhi, India by Hammer and Das found:
A. doctors in public clinics were often more creative in diagnoses and care than doctors in private facilities. B. the implementation of national healthcare provisions had strong associations with quality of care. C. unless doctors were intrinsically motivated, no incentive exists for them to provide high quality care. D. doctors often worked at or beyond their knowledge frontier.
Which of the following is INCORRECT regarding monopoly and profits?
A) The mere existence of a monopoly does not guarantee high profits. B) Numerous monopolies have gone bankrupt. C) A monopolist will never experience economic losses. D) The monopolist reaches profit-maximizing output by trial and error.