Kathleen likes avocado and crab dip. After eating avocado and crab dip with four crackers, she switches to cheese with crackers. We can conclude that
A. at this point cheese and crackers have a higher marginal utility per dollar spent than that of avocado and crab dip with crackers.
B. the avocado and crab dip cannot have tasted that good.
C. the avocado and crab dip with crackers now has a marginal utility of zero.
D. Kathleen is no longer maximizing her utility.
Answer: A
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According to the Keynesian model, real wages should
A) remain constant. B) fall during recessions. C) rise during recessions. D) stay the same during recessions but rise during expansions.
Average product curve tells us:
A. the level of inputs that are the most productive. B. the cost-minimizing level of inputs to hire. C. the profit-maximizing level of inputs to hire. D. All of these are true.
When the government fixes its exchange rate
a. it creates an unfavorable balance of trade b. it creates trade surpluses c. it does so to allow the exchange rate to reach equilibrium d. it acts as an arbitrager e. it is not unlike a government policy to control agricultural prices
Consider two countries, A and B. Country A has a more egalitarian distribution of incomes if
a. it has a lower Gini coefficient than B b. the Lorenz curve for B lies above the one for A c. the percentage of the population below the poverty line is higher in B d. its Lorenz curve intersects from above B's Lorenz curve e. its Lorenz curve intersects from below B's Lorenz curve