this diagram Cfuture Yfuture B IC₁ A → Ctoday Ytoday

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter2: Choice In A World Of Scarcity
Section: Chapter Questions
Problem 12RQ: Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?
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A consumer who starts (i.e. has an endowment) at point B, and has preferences shown by IC1, will want to borrow. 

Question 13Select one:

True

False

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Assuming a mix of present and future consumption is preferred, ANY consumer who starts (i.e. has an endowment) at point A will gain utility from a rise in interest rates. 

Question 14Select one:

True

False

Question text

A consumer who starts at point B will want to borrow, but as little as possible in order to minimise the cost of interest. 

Question 15Select one:

True

False

Question text

If a consumer starts at point A, and then receives extra income in the present, this would appear as an outward shift of the budget constraint. 

Question 16Select one:

True

False

this diagram
Cfuture
Yfuture
B
IC₁
A
→ Ctoday
Ytoday
Transcribed Image Text:this diagram Cfuture Yfuture B IC₁ A → Ctoday Ytoday
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