Author Question: Which of the following claims is true at each point along a price-consumption curve? A) Utility ... (Read 46 times)

gonzo233 · **on:** Jul 1, 2018

Which of the following claims is true at each point along a price-consumption curve?

A) Utility is maximized but income is not all spent.
B) All income is spent, but utility is not maximized.
C) Utility is maximized, and all income is spent.
D) The level of utility is constant.

Question 2

A firm's short-run average cost curve is U-shaped. Which of these conclusions can be reached regarding the firm's returns to scale?

A) The firm experiences increasing returns to scale.
B) The firm experiences increasing, constant, and decreasing returns in that order.
C) The firm experiences first decreasing, then increasing returns to scale.
D) The short-run average cost curve reveals nothing regarding returns to scale.