Pam is determined to lose 10 pounds and plans to adhere to a strict diet. But at the coffee break, she sees tray of glazed donuts and can't resist. She forgoes the plain bagel and devours a donut. Both the donut and bagel are priced at $0.50 . When her office mates tease her, she says matter-of-factly that
a. the MU/P of donuts is higher than that of the bagel, and that's that!
b. the MU/P of bagels is higher than that of the donut, and that's that!
c. the consumer surplus associated with bagels was higher than it was for donuts, making donuts more attractive
d. when it comes to food, she's irrational
e. the MU of losing 10 pounds is less than the MU of eating one donut.
A
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If the federal government has a budget surplus, then the national debt is:
a. reduced. b. fully repaid. c. negative. d. interest-free.
Markets are extraordinarily useful and flexible institutions through which society can allocate its scarce resources. However:
a. a true democracy has no place for market-driven events. b. this only holds true when people act rationally. c. there is no useful role for government in this system. d. markets may sometimes produce unwanted results.
Today, the world is not just experiencing more change or more rapid change, but qualitatively new conditions, particularly a dramatic loss in the ability of states to
a. protect their borders. b. maintain democratic governments. c. control economies. d. wage war.
Which statement is true?
A. On the production possibilities frontier there is zero unemployment. B. On the production possibilities frontier 95 percent of the labor force is employed. C. To get out of a recession, we must produce at some point beyond our production possibilities frontier. D. To have economic growth, we must push the production possibilities frontier inward.