Suppose that an individual consumes just two goods: Big Macs and milkshakes. In order to reach consumer equilibrium, the individual must arrange the consumption of Big Macs and milkshakes so that the:
a. marginal utility of the two goods is equal for the last dollar spent on each good.
b. ratio of marginal utility to price is the same for both goods for the last dollar spent on each good.
c. ratio of marginal utility of milkshakes to the marginal utility of Big Macs is 1 for the last dollar spent on each good.
d. price paid for the two goods is the same.
b
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A safety measure whose benefits outweigh its costs is called a ________
Fill in the blank(s) with correct word
Covered interest arbitrage involves both
A) the purchase of a foreign asset and a forward contract in the market for foreign exchange. B) the purchase of a domestic asset and a spot contract in the market for foreign exchange. C) the sale of a foreign asset and the purchase of a forward contract in the market for foreign exchange. D) the sale of domestic stocks and the purchase of foreign bonds. E) None of the above.
Which of the following both reduce net exports?
a. exports rise, imports rise b. exports rise, imports fall c. exports fall, imports rise d. exports fall, imports fall
Kelly eats five slices of pizza on a Friday night but admits each slice of pizza doesn't taste as good as the previous one. This suggests that for Kelly
A. the marginal utility of a slice of pizza is negative. B. the total utility of slices of pizza is increasing by larger and larger increments. C. the total utility of slices of pizza is declining. D. the marginal utility of a slice of pizza is positive but decreasing.