Consumer Choice Theory Predicts That,with Identical Consumers,fully-Funded Social Security

question 25

Multiple Choice

Consumer choice theory predicts that,with identical consumers,fully-funded social security

• A) always makes all generations worse off.
• B) makes some generations better off, and cannot make any generation worse off.
• C) may make some generations worse off and cannot make any generation better off.
• D) may be Pareto improving.
• E) can potentially reduce welfare.

Explain the effects of short-run profit on market dynamics and long-run equilibrium in price-taker industries.

Analyze the impact of changes in demand and supply on market prices and output in the short and long run.

Describe the conditions for long-run equilibrium in price-taker markets and the concept of economic profit.

Identify the factors that determine the long-run supply curve's shape in different types of industries.

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Definitions:

Total Contribution Margin

The difference between total sales revenue and total variable costs, indicating the amount available to cover fixed expenses and generate profit.

Operating Leverage

A measure of how sensitive net operating income is to a given percentage change in revenue, indicating the proportion of fixed versus variable costs.

Income Statement

A financial report that shows a company's revenues, expenses, and profit or loss over a specific period.

Contribution Margin Ratio

The percentage of each sales dollar that remains after deducting variable costs, calculated as contribution margin divided by sales.