A true cost-of-living adjustment in response to a change in prices would compensate consumers so that they would be able to
A) purchase the same bundle they purchased before prices changed.
B) achieve the same level of utility they did before prices changed.
C) face the same choices they did before prices changed.
D) achieve an increase in utility that is equal to the rate of inflation.
B
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If the consumption of Good A by one person does not decrease the quantity of Good A available for another person's consumption, then the good is said to be
A) nonrival. B) rival. C) nonexcludable. D) excludable.
Which of the following statements best reflects a price-taking firm?
a. The firm can sell only a limited amount of output at the market price before the market price will fall. b. If the firm were to charge less than the going price, it would maximize its profits and revenues. c. If the firm were to charge more than the going price, it would sell none of its goods. d. Both b and c are correct.