The slope of a consumer's indifference curve between two commodities represents
a. her marginal rate of substitution between the commodities.
b. the relative prices of the goods.
c. her marginal revenue from selling the commodities.
d. her marginal revenue product from consuming the commodities.
a
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With a rise in the stock market, the simple LCH model with no bequests predicts ________ in current consumption. Then when adding to the model bequests due to catastrophic illnesses and expenses that fail to occur, current consumption is ________
A) a fall, still predicted to fall B) a fall, predicted to rise C) no change, predicted to rise D) a rise, still predicted to rise E) a rise, predicted to remain unchanged
Assume a machine that has a useful life of only one year costs $2,000. Assume, also, that net of such operating costs as power, taxes, and so forth, the additional revenue from the output of this machine is expected to be $2,300. If the firm finds it can
borrow funds at an interest rate of 10 percent, the firm should: A. not purchase the machine because the expected rate of return exceeds the interest rate. B. not purchase the machine because the interest rate exceeds the expected rate of return. C. purchase the machine because the expected rate of return exceeds the interest rate. D. purchase the machine because the interest rate exceeds the expected rate of return.