Why is voluntary exchange an important source of economic prosperity?
A) All of the above are correct.
B) It makes it possible to produce a larger output as a result of gains from division of labor and specialization.
C) It makes it possible to produce a larger output as a result of lower per unit costs that often accompany large-scale production.
D) It moves goods from people who value them less to people who value them more.
A) All of the above are correct.
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If an individual's indifference curve map does not obey the assumption of a diminishing MRS, then:
a. the individual will not maximize utility. b. the individual will buy none of good x. c. tangencies of indifference curves to the budget constraint may not be points of utility maximization. d. the budget constraint cannot be tangent to an appropriate indifference curve.
Which of the following statements is correct?
a. The demand for natural gas is more elastic over a short period of time than over a long period of time. b. The demand for smoke alarms is more elastic than the demand for Persian rugs. c. The demand for bourbon whiskey is more elastic than the demand for alcoholic beverages in general. d. All of the above are correct.