Define the following terms:
a) Indifference curve
b) Utility
a) An indifference curve is a graph that shows all bundles of goods and services that provide an equal level of satisfaction for the consumer.
b) Utility refers to a measure of satisfaction or happiness that a consumer receives from consuming a good or service.
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The level of GDP at which planned expenditure equals the amount of output produced is the
A) equilibrium output. B) potential output. C) long-run output. D) autonomous output.
Suppose the market clearing price for apples falls from $3.00 to $2.00 per pound, and the overall market clearing output increases from 1 million to 2 million pounds. How can we explain the fall in price and increase in market output?
A) Supply decreased and demand remained unchanged. B) Supply remained unchanged and demand decreased. C) Demand increased and supply remained unchanged. D) Demand remained unchanged and supply increased.