Which of the following is not true regarding the outcome of a consumer’s optimization process ?
A. The marginal utility per dollar spent on each good is the same
B. The marginal rate of substitution between goods is equal to the ratio of the prices between goods
C. The consumer’s indifference curve is tangent to his budget constraint
D. The consumer has reached his highest indifference curve subject to his budget constraint
E. The consumer is indifferent between any two points on his budget constraint
If consumption when young and when old are both normal goods, an increase in the interest rate ?
A. will always increase the quantity of saving
B. will always decrease the quantity of saving
C. will increase the quantity of saving if the substitution effect outweighs the income effect
D. will increase the quantity of saving if the income effect outweighs the substitution effect
If income where to double and prices were to to double the budget line would ?
A. stay the same
B. rotate inward
C. shift outward in a parallel fashion
D. rotates outward
E. shift inward in parallel fashion
A. an inferior effect
B. a Geffen good
C. a normal good
D. none of these answers
A. Z to point X
B. X to point X
C. X to point Z
D. Y to point X
A. a substitute good
B. a normal good
C. a complementary good
D. an inferior good