What are the four dimensions of the typical consumer’s situation?
Please provide the best answer for the statement.
First, the consumer is a rational person who tries to maximize total utility. Second, the consumer has preferences for certain types of products and also has an idea of how much marginal utility will be obtained from consuming an additional unit. Third, the consumer has a budget constraint that limits the amount of products purchased, although this constraint is tighter for lower income consumers than higher income ones. Fourth, each product that the consumer wishes to purchase has a positive price that reflects the relative scarcity or value of the product. These conditions serve as the basis for understanding how the consumer allocates money income to purchases of different products to maximize utility.
You might also like to view...
A ________ is owned by its stockholders
A) sole proprietorship B) partnership C) corporation D) All of the above are correct.
If a union negotiates and obtains a wage rate above the competitive wage rate,
A) it must find a way to make workers more productive. B) employment in the union sector will increase relative to employment in the nonunion sector. C) it must find a way to ration jobs among the excessive number of workers who wish to work in the union sector. D) unemployment will increase in the nonunion sector relative to the union sector.
Assume a machine that has a useful life of only one year costs $2,000. Assume, also, that net of such operating costs as power, taxes, and so forth, the additional revenue from the output of this machine is expected to be $2,300. If the firm finds it can
borrow funds at an interest rate of 10 percent, the firm should: A. not purchase the machine because the expected rate of return exceeds the interest rate. B. not purchase the machine because the interest rate exceeds the expected rate of return. C. purchase the machine because the expected rate of return exceeds the interest rate. D. purchase the machine because the interest rate exceeds the expected rate of return.
Most Americans
A. have accurate perceptions of the level of corporate profits. B. underestimate corporate profits. C. overestimate corporate profits. D. believe that corporations earn zero profit.