Robinson spends all his income on mangos and bananas. Mangos cost $3 per pound and bananas cost $1 per pound. The marginal utility is 24 for the last pound of mangos purchased and 10 for the last pound of bananas
To maximize his utility, Robinson should buy A) more mangos and fewer bananas.
B) more bananas and fewer mangos.
C) the present combination of goods.
D) only mangos.
B
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As a result of the 2008-2009 financial crisis and the decrease in GDP in many European economies, we would expect
A) an increase in the demand for U.S. exports and a leftward shift in the demand curve for dollars. B) a decrease in the demand for U.S. exports and a leftward shift in the demand curve for dollars. C) a decrease in the demand for U.S. exports and a rightward shift in the demand curve for dollars. D) a decrease in the demand for U.S. imports and a movement up along the demand curve for dollars.
Exhibit 14-1 Private and social cost
The perfectly competitive profit-maximizing firm in Exhibit 14-1 creates water and air pollution as a consequence of producing its output of pigs. If pollution costs are borne by third parties, the firm will maximize economic profit by choosing to:
A. voluntarily incur costs to reduce its pollution. B. produce at output rate Q3. C. produce at output rate Q2. D. produce at output rate Q4.
Large differences in inflation rates among countries are almost always the result of large differences in
A. productivity. B. the growth rates of nominal money supplies. C. the growth rates of real money demand. D. real income growth.
Refer to the table below. Based on taste and preference alone, which good does the child prefer?
A child is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from each product are as shown in the following table:
A. Chocolates
B. Hard candies
C. The child equally likes chocolates and hard candies
D. One cannot tell from the given data