Whenever indifference curves have kinks, marginal willingness to pay curves have horizontal "flat spots".
Answer the following statement true (T) or false (F)
False
Rationale: If anything, they will have vertical "flat spots" as the MRS (a variant of which appears on the vertical axis of marginal willingness to pay curves) is not well defined at the kink quantity but is defined everywhere else.
You might also like to view...
The difference between quantity restrictions and price ceilings as to their effect on the market is that
A) only price ceilings make the market inefficient. B) only quantity restrictions make the market inefficient. C) while some consumers gain from price ceilings, no consumers gain from quantity restrictions. D) while price ceilings are efficient, quantity restrictions are not.
Mr. Jones pays his employees by the hour. He believes they purposely work slowly to maximize their personal satisfaction. What can he do to provide them with a stronger incentive to work efficiently?