When consumers act as price-takers, we say that they behave A) ...

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When consumers act as price-takers, we say that they behave
 
  A) cooperatively.
  B) competitively.
  C) monopsonistically.
  D) irrationally.

Question 2

When there are credit market frictions, Ricardian equivalence may not hold because
 
  A) consumers cannot understand the implications of the government budget constraint.
  B) a tax cut in the present with a future increase in taxes works effectively like a loan.
  C) an increase in government saving is matched one-for-one by a decrease in private saving.
  D) social security is fully-funded.

[Perkypinki]

Answer to Question 1

B

Answer to Question 2

B

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Excellent

[xiaomengxian]

Gracias!