Which of the following statements is true?
A. Corner solutions always satisfy the tangency condition.
B. Interior solutions may or may not satisfy the tangency condition.
C. Interior solutions always satisfy the tangency condition.
D. Whenever the consumer purchases good X but not good Y, then MRSXY ? PX/PY at the chosen bundle.
C. Interior solutions always satisfy the tangency condition.
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If your disposable income increases from $10,000 to $15,000 and your consumption increases from $9,000 to $12,000, your marginal propensity to consume is:
A.0.8 B.0.6 C.0.4 D.0.2
Which of the following criteria should be used to evaluate if government intervention in a market for the purpose of environmental protection is justified?
A) Is the intervention program economically efficient? B) Does the intervention program reduce pollution to zero? C) Does the intervention program maximize economic surplus? D) Does the intervention program minimize environmental damage?