Answer the following statements true (T) or false (F)
1. The consumer will select that point on the budget line which puts the consumer on the highest attainable indifference curve.
2. A consumer maximizes total utility when she or he purchases the combination of the two products at which her or his budget line is tangent to an indifference curve.
3. An increase in the price of a product normally enables a consumer to reach a higher indifference curve.
4. It is possible that as a result of the budget line shifting outwards, the consumer will buy less of a product.
1. TRUE
2. TRUE
3. FALSE
4. TRUE
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Comparisons between industrialized nations and less-developed countries indicates that as income rises, the demand for a clean and well-preserved environment
a. increases by a proportional amount. b. decreases by a proportional amount. c. increases by a more than proportional amount. d. decreases by a less than proportional amount.
Which of the following addresses agency costs?
a. spot checks of the quality of employee work b. hiring only from job fairs c. instituting longer work days d. reducing the number of holidays