The above table shows Homer's marginal utility from consuming various quantities of chocolate chip cookies and cake. The price of cookies is $1 per pound, the price of cake is $2 per slice and Homer has $9 to spend on cookies and cake
Homer will consume ________ pounds of cookies and ________ slices of cake. A) 5; 2
B) 2; 5
C) 3; 3
D) None of the above answers is correct.
A
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Total surplus can be increased if:
A. new markets are created. B. new technology is banned. C. deadweight loss is increased. D. All of these can increase total surplus.
The macroeconomy is said to be in long-run equilibrium only if
a. the resource, loanable funds, foreign exchange, and goods and services markets are all in equilibrium. b. prices were incorrectly estimated by decision makers. c. the output of the economy exceeds the full-employment level of output. d. the economy is operating along its short-run aggregate supply curve.
Why is deflation such a problem for consumption and investment?
A. It increases the rate of both. B. It causes firms and households to spend more. C. It slows both. D. It slows investment while simultaneously increases consumption.
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.