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Unformatted text preview: scarce, does diminishing marginal utility contradict the statement that individuals always want more of all goods? 10. 11. 6. Describe each of the four properties of indifference curves. 12. 13. 7. Describe and explain the budget constraint. How does a consumer maximize utility under a given budget constraint? How do consumers know if they are not maximizing utility? 14. 15. 8. Explain what is meant by "asymmetric information." Identify and explain the two basic types of problems that arise when there is asymmetric information. 16. 17. 9. Explain the Condorcet Paradox, the failure of majority rule to produce transitive preferences for society. Explain Arrows impossibility theorem. What does this say about society's choices? 18. 19. 10. When prices change, the income effect and substitution effect both contribute to the impact on quantities consumed. Explain how both affect a consumer's utility maximization....
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This note was uploaded on 09/09/2010 for the course ACCOUNTING 2345 taught by Professor Dr.ijueh during the Spring '10 term at twsu.edu.
- Spring '10