If Ellie Mae spends her income on possum and biscuits, and the price of possum is three times the price of biscuits, then when Ellie Mae maximizes total utility, she will buy
a. equal quantities of possum and biscuits
b. three times as much possum as biscuits
c. three times as many biscuits as portions of possum
d. biscuits and possum until the marginal utility of possum is three times the marginal utility of biscuits
e. biscuits and possum until the marginal utility of biscuits is three times the marginal utility of possum
D
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In the figure above, suppose that $20 is the market equilibrium price. What is the amount of the consumer surplus?
A) $3,375 B) $3,000 C) $375 D) 150 units E) $1,500
Assume the government decides to impose a per-unit tax on a good produced in a perfectly competitive market
a. Graphically illustrate the short-run effects of the tax on the cost conditions faced by a representative firm in the market. b. Explain the adjustment process to long-run equilibrium in the market. What has happened to long-run equilibrium price and output as a result of the tax? What has happened to the number of firms in the market? Why?
If you deposit $300 in your bank and the required reserve ratio is 10%, your bank will have
A) an increase in required reserves of $300. B) an increase in required reserves of $270. C) an increase in required reserves of $3000. D) an increase in required reserves of $30 and an increase in excess reserves of $270.
Consider the following misperceptions model of the economy.AD: Y = 600 + 10(M/P)SRAS: Y = 
+ P - PeOkun's Law: (Y - 
)/ 
= -2(u - 
)Let 
= 750, = 0.05, M = 600, and Pe = 40.(a)What is the price level?(b)Suppose there is an unanticipated increase in the nominal money
supply to 800. What is the short-run equilibrium level of output, the unemployment rate, and the price level?(c)When price expectations adjust fully, what is the price level? What will be an ideal response?