The reason economists create a market basket is to:
A. see how the cost of buying the goods and services on the list changes over time.
B. get a sense of how people buy items on a weekly basis.
C. know how each individual consumer is being affected by changing prices.
D. track its changing prices to reflect changes in purchasing patterns of firms.
Answer: A
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"A demand curve is the same as a marginal cost curve." Is this statement correct or incorrect? Explain your answer
What will be an ideal response?
The above figure shows Jane's budget line and two of her indifference curves. Jane's marginal rate of substitution is
A) the rate at which she would give up a lobster dinner for a steak dinner and consider herself just as well off. B) equal to the ratio of the price of a steak dinner to the price of a lobster dinner when she is at her best affordable point. C) equal to 2 lobster dinners per steak dinner at her best affordable point. D) Both answers A and B are correct.