The marginal rate of substitution represents the maximum amount of one commodity a consumer is willing to give up in exchange for one more unit of another commodity.
Answer the following statement true (T) or false (F)
True
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Refer to the above figure. The figure represents the saving function for the consumer. Point A represents
A) the point at which saving equals zero. B) a situation in which saving is positive. C) a situation in which saving is negative. D) the amount of autonomous consumption.
For purposes of monetary policy, the Federal Reserve has targeted the interest rate known as the
A) prime rate. B) Treasury bill rate. C) federal funds rate. D) discount rate.
When creating a demand curve for a good where one group gets the good for free and another group must pay the market price, you must
A. add the amount that the first group wants (when it is available to them free) to the quantity demanded by the second group at each price. B. add the price paid at each quantity. C. take an average of the quantity demanded at each price. D. add the quantity demanded for each group at each price.
Relative to a perfectly competitive market, a monopoly results in
A) a gain in producer surplus equal to the gain in consumer surplus. B) a gain in producer surplus equal to the loss in consumer surplus. C) a gain in producer surplus less than the loss in consumer surplus. D) greater economic efficiency.