Rosenbaum is purchasing products C and D in utility-maximizing amounts. If the price of C is $4 and the price of D is $2, then:
A) the marginal utility of D is twice that of C.
B) the marginal utility of D is the same as that of C.
C) the marginal utility of C is twice that of D.
D) the marginal utility of C is four times that of D.
Ans: C) the marginal utility of C is twice that of D.
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An economist might be hired to answer which of the following questions?
a. What will the price of oil be next year? b. Why is the median income of women about half the median income of men? c. How much will interest rates change as the federal deficit decreases? d. How much will inflation change if import restrictions are imposed? e. All of the above are correct.
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a. True b. False Indicate whether the statement is true or false
Define the following terms carefully: (a) Full employment (b) Purchasing power of money (c) Real wage rate (d) Relative price