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Diminishing marginal rate of substitution implies that
Correct answer(s):
- Indifference curves are convex from the origin
Along the same indifference curve, MRS is
Correct answer(s):
- Decreasing as more of one good is obtained
The marginal rate of substitution (MRS) determines the rate at which a consumer is willing to substitute between two goods in order to achieve
Correct answer(s):
- The same level of satisfaction
By the property of “more is better,” the consumer views the products under consideration as
Correct answer(s):
- Goods
A≻B means
Correct answer(s):
- Bundle A is preferred to bundle B
What is the horizontal intercept of the budget line, given that M = $1,000, PX = $50, and PY = $40?
Correct answer(s):
- 20.0
Consumers adjust their purchasing behavior so that:
Correct answer(s):
- The ratio of prices they pay equals their marginal rate of substitution
Managers can get workers to work longer hours by:
Correct answer(s):
- Offering overtime pay
Suppose earnings are given by E = $60 + $7(24 – L), where E is earnings and L is the hours of leisure. What is the price to the worker of consuming an additional hour of leisure?
Correct answer(s):
- $7
Suppose earnings are given by E = $60 + $7(24 – L), where E is earnings and L is the hours of leisure. The fixed payment for this worker is:
Correct answer(s):
- $60
Suppose earnings are given by E = $60 + $7(24 – L), where E is earnings and L is the hours of leisure. What is the maximum this worker can earn in three (3) days?
Correct answer(s):
- $684
Suppose earnings are given by E = $60 + $7(24 – L), where E is earnings and L is the hours of leisure. How much is this person working if their daily earnings are $116?
Correct answer(s):
- 16 hours
Normally owners of firms should try to induce their managers to care:
Correct answer(s):
- Solely about profits
A worker’s total earnings for one day is $100. He received a $20 fixed payment and consumes 14 hours of leisure. What is the hourly wage rate?
Correct answer(s):
- $8
The total earnings of a worker are represented by E = 100 + $10(24 – L), where E is earnings and L is the number of hours of leisure. How many hours of leisure are consumed if this worker’s total earnings are $160?
Correct answer(s):
- 18 hours
The total earnings of a worker are represented by E = 100 + $10(24 – L), where E is earnings and L is the number of hours of leisure. How much will the worker earn if he takes 14 hours of leisure per day?
Correct answer(s):
- $200
If a worker receives a fixed payment of $100 plus $10 for every hour she works, what is the maximum total earnings the worker can receive if they are restricted to a maximum of 12 hours of work per day?
Correct answer(s):
- $220
If you were running an advertising campaign for designer men’s suits, you should target families with:
Correct answer(s):
- Higher incomes
If you wish to open a store and you do not like risk, it would be wise to sell:
Correct answer(s):
- A mix of normal and inferior goods
A price increase causes a consumer’s “real” income to:
Correct answer(s):
- Decrease