You are studying with a friend, and your friend says To maximize utility, a consumer must consume the combination of goods so that the marginal utility of good X equals the marginal utility of good Y.
Explain whether your friend's statement is correct or incorrect.
Ques. 2Consider the labor market depicted in the above figure. The competitive equilibrium would be for ________ hours of employment.
A) 200
B) 400
C) 600
D) None of the above answers is correct.
Ques. 3What is meant by the term exclusive dealing? Give an example of an exclusive deal. When is it illegal?
What will be an ideal response?
Ques. 4In the above figure, which of the following statements is TRUE? I. The consumer maximizes utility by consuming at point A. II. The marginal rate of substitution at point B and point A are equal because they are on the same budget line.
A) only I
B) only II
C) both I and II
D) neither I nor II
Ques. 5A farmer discovers that the total cost of growing 50 acres of eggplant is 50,000 and that the total cost of growing 51 acres of eggplant is 52,000. The marginal cost of the 51st acre of eggplant is
A) 52,000.
B) 50,000.
C) 2,000.
D) 1,000.
Ques. 6A competitive market is always efficient.
Indicate whether the statement is true or false
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