Daisy is consuming X and Y so that she is spending her entire income and MUx/Px = 12 and MUy/Py = 10. To maximize utility, she should
A. consume more X and less Y.
B. consume less of both X and Y.
C. consume less X and more Y.
D. continue to consume the same amount of X and Y since she is already maximizing utility.
Answer: A
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A quintile is a group that contains
A) exactly 5 people. B) exactly one-fifth of the population. C) five identical siblings. D) five musicians or singers.
If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of the following would explain this pattern of trade?
A) The opportunity cost of producing butter in Denmark is higher than the opportunity cost of producing butter in Sweden. B) Sweden has a higher opportunity cost of producing cell phones than Denmark, and Denmark has a higher opportunity cost of producing butter. C) Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter. D) Sweden must have an absolute advantage in producing cell phones and Denmark must have an absolute advantage in producing butter.
Refer to Scenario 13.9. The equilibrium of this game, if played only once, is that
A) both firms pollute. B) only Lago pollutes. C) only Nessie pollutes. D) neither firm pollutes. E) the firms choose a mixed strategy.
A bank currently has checkable deposits of $100,000, reserves of $30,000, and loans of $70,000 . If the required reserve ratio is lowered from 20 percent to 15 percent, this bank can increase its loans by:
a. $15,000. b. $10,000. c. $75,000. d. $ 0. e. $5,000.