A consumer has spent all of his income on pizza and movies. The price of a piece of pizza is $1 and the price of a movie is $6. The marginal utility of the last piece of pizza is 5 and the marginal utility of the last movie is 24. The consumer has
A. not maximized utility. He should cut back consumption of each good.
B. maximized utility.
C. not maximized utility. He should cut back on pizza and buy more movies.
D. not maximized utility. He should cut back on movies and buy more pizza.
Answer: D
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The current account includes
A) the value of trade in merchandise. B) services. C) unilateral transfers. D) All of the above.
Protectionism tends to be concentrated in two sectors
A) agriculture and clothing. B) high-tech and national security sensitive industries. C) capital and skill intensive industries. D) industries concentrated in the South and in the Midwest of the country. E) financial services and manufacturing based in the Midwest.
In a monopolistically competitive scenario, as more firms enter into the industry, the long run demand curve for most firms will tend to become: a. more inelastic. b. vertical
c. horizontal. d. more elastic.
Define the following terms and explain their importance in the study of macroeconomics: a. Consumer expenditures b. Investment spending c. National income d. Transfer payments
What will be an ideal response?