Author Question: You may consume ice cream or frozen yogurt, and ice cream consumption is plotted along the ... (Read 141 times)

evelyn o bentley · **on:** Jul 1, 2018

You may consume ice cream or frozen yogurt, and ice cream consumption is plotted along the horizontal axis of your indifference map. The prices are denoted PY for frozen yogurt and PIC for ice cream.

Under what condition will you only consume frozen yogurt? A) MRS is greater than PIC/PY
B) MRS is less than PIC/PY
C) MRS is less than PY/PIC
D) MRS is infinite

Question 2

Price ceilings can result in a net loss in consumer surplus when the ________ curve is ________.

A) demand; very elastic
B) demand; very inelastic
C) supply; very inelastic
D) none of the above; price ceilings always increase consumer surplus