Suppose the price of a soda is $2 each, the price of a hot dog is $3 each and the budget is $20. If the marginal utility of the fourth soda is 100 and the marginal utility of the fourth hot dog is 150, to maximize utility, a person will buy
A) 4 sodas and 4 hot dogs.
B) more hotdogs than 4 and fewer sodas than 4 because hot dogs provide more utility.
C) more sodas than 4 to increase their utility.
D) fewer sodas than 4 and more hot dogs than 4.
A
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Other things remaining the same, as the real interest rate increases,
A) firms will borrow more funds. B) firms' demand for funds will not change. C) the demand for loanable funds curve shifts leftward. D) firms will purchase new capital with its own funds instead of taking a loan. E) firms will borrow less funds.
Refer to Figure 15-14. In the figure above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could the Federal Reserve use to move the economy to point C?
A) increase the required-reserve ratio B) sell Treasury bills C) decrease income taxes D) buy Treasury bills
Consider a small open economy with desired national saving of Sd = 200 + 10,000rw and desired investment of Id = 1000 - 5000rw. If rw = 0.05, and output = 5000, then absorption equals
A) 5100. B) 5050. C) 4950. D) 4900.
Trade between nations usually means that
A. one country is richer than another. B. one country becomes richer while the other becomes poorer. C. both trading nations show some gains. D. one trading country is trying to “beggar its neighbor.”