Use the following statements to answer this question: I. The equal marginal principle may be used to characterize the maximum utility consumption decision even if the diminishing MRS assumption does not hold. II
The equal marginal principle implies that the MRS at the optimal consumption bundle is always equal to the price ratio. A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.
D
Economics
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Lee earns more than does Pat. Which of the following can explain why?
A) Pat is discriminated against. B) Lee has more human capital. C) Lee has a greater degree of specialization in earning an income. D) All of the above could be a factor leading to the wage difference.
Economics
When the transmission mechanism breaks down, macroeconomists call this the
A. debt ceiling. B. crowding in. C. crowding out. D. liquidity trap.
Economics