Suppose a consumer's utility function is U(F0, F1) = F00.6F10.4, where F0 represents food consumed this year and F1 represents food consumed next year. For that utility function, the marginal utility of food consumed this year is 0.6 × (F1/F0)0.4 and the marginal utility of food consumed next year is 0.4 × (F0/F1)0.6. Which of the following expressions gives the consumer's marginal rate of substitution for food this year with food next year (MRS01)?
A. MRS01 = F1/F0
B. MRS01 = (2/3) × (F0/F1)
C. MRS01 = (2/3) × (F1/F0)
D. MRS01 = (3/2) × (F1/F0)
C. MRS01 = (2/3) × (F1/F0)
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In the "Prisoners' Dilemma" game: a. When the prisoners follow their dominant strategy and confess, both will be worse off than if each had remained silent. b. a player would be better off if he did not confess and the other player confessed
c. a player would be better off if both he and the other player confessed. d. None of the above is true.
One way to place a value on human life is to examine the risks that people voluntarily take and how much they must be paid for taking them. What is the approximate value of a human life according to studies that use this approach?
Which of the following would make the equilibrium real interest rate decrease and the equilibrium quantity of loanable funds increase?
a. The demand for loanable funds shifts right. b. The demand for loanable funds shifts left c. The supply of loanable funds shifts right. d. The supply of loanable funds shifts left.
Figure 33-3
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Given the situation in graph (1) in Figure 33-3, what can be expected to change in graph (1) when the economy’s self-correcting mechanism operates?
A. Aggregate demand increases. B. Aggregate demand decreases. C. Aggregate supply increases. D. Aggregate supply decreases.