The assumption that preferences are complete:
A) means that a consumer will spend her entire income.
B) is unnecessary, as long as transitivity is assumed.
C) recognizes that there may be pairs of market baskets that cannot be compared.
D) means that the consumer can compare any two market baskets of goods and determine that either one is preferred to the other or that she is indifferent between them.
D
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According to the "paradox of thrift," an increase in the
A. average propensity to save results in an increase in national output. B. average propensity to save results in a decrease in unemployment. C. saving function (upward shift) can result in a decrease in both national output and total saving. D. consumption function (upward shift) results in a decrease in national income.
Refer to Figure 26.1. The output that maximizes production efficiency for this firm is
A. Q1. B. Q2. C. Q3. D. Q4.