Which of the following statements is true about a consumer's optimal decision when indifference curves are concave?
A) Both goods are consumed.
B) No goods are consumed.
C) Only one of the goods is consumed.
D) It occurs at the point of tangency with the budget line.
C
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Suppose an economist says that "other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that:
A. the quantity of bananas purchased determines the price of bananas. B. all factors other than the price of bananas (for example, consumer tastes and incomes) are assumed to be constant. C. economists can conduct controlled laboratory experiments. D. one cannot generalize about the relationship between the price of bananas and the quantity purchased.
Which of the following is true about income inequality?
A. Inequality tends to diminish as the population increases. B. Inequality tends to be greatest in the poorest countries. C. Inequality tends to get worse as a country develops. D. Inequality is not an issue for developed countries.