What is an indifference curve and how does a preference map show preferences?
What will be an ideal response?
An indifference curve shows those combinations of goods for which a consumer is indifferent. The consumer has the same level of satisfaction for any combination on a given indifference curve. The family of indifference curves is the preference map. This map shows the person's preferences because it shows how the person ranks each combination of goods. In particular, the person prefers combinations on higher indifference curves to combinations on lower indifference curves.
You might also like to view...
"If production of a good creates an external cost, then, when production is such that the marginal private costs are equal to the marginal private benefits, the market outcome will be inefficient
" Explain whether this assertion is correct or incorrect.
The best example of a transfer payment would be ___.
A. govenment investment B. government purchases C. government giving funds to the unemployed D. the government paying its workers
If the Fed simultaneously reduces the discount rate and the required reserve ratio, the money supply will:
A. remain unchanged. B. contract. C. expand. D. take on a value that cannot be determined from the information given.
Refer to the above figure. Which panel is consistent with the Laffer curve?
A. Panel A B. Panel B C. Panel C D. Panel D