Suppose that choice sets are convex but we tastes may or may not be convex. (Assume all our other usual assumptions about tastes hold.) The first order conditions of the constrained utility maximization problem are then
A. necessary conditions for a true optimum.
B. sufficient conditions for a true optimum.
C. necessary and sufficient conditions for a true optimum.
D. none of the above.
Answer: D
You might also like to view...
Refer to the scenario above. How will the demand for pens faced by the existing pen manufacturers in Eduland be affected if several firms exit the industry in the long run?
A) The demand curve by existing firms will become perfectly inelastic. B) The demand curve by existing firms will become perfectly elastic. C) The demand faced by existing firms will increase. D) The demand faced by existing firms will decrease.
All other factors being constant, a reduction in price tends to cause which of the following?
A. a reduction in quantity supplied and an increase in quantity demanded B. an increase in quantity supplied and a reduction in quantity demanded C. an increase in supply and an increase in demand D. a reduction in supply and an increase in demand
Which of the following statements is TRUE about the market and individual firm's supply curve for labor?
A) The market supply curve is perfectly elastic and the individual firm's supply curve is perfectly inelastic. B) The market supply curve is perfectly inelastic and the individual firm's supply curve is perfectly elastic. C) The market supply curve is more elastic than the firm's supply curve. D) The market supply curve is more inelastic than the firm's supply curve.
If the Federal Reserve raises the discount rate, we would expect the
A. AS curve to increase. B. AD curve to increase. C. Investment curve to increase. D. AD curve to decrease.