Suppose that Tracy Stuart spends all of her income on two goods, A and B, in a manner in which MUa = 15 and MUb = 80, and the Pa = $5 and the Pb = $20 . Then she
a. is already maximizing her total utility and should make no change
b. should increase her purchases of B and decrease her purchases of A
c. should raise MUa so that the MUa/Pa ratio is higher, giving her reason to buy more of A and less of B
d. should raise MUa so that the MUa/Pa ratio is higher, giving her reason to buy more of B and less of A
e. should increase her purchases of A and decrease her purchases of B
B
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Answer the next question on the basis of the following information about the opportunity costs of two products-fish (F) and chicken (C)-in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and these are the only two nations in the world. Finally, the opportunity costs of fish in terms of chicken are: Singsong: 1F = 2C, Harmony: 1F = 4C. Which one of the following would not be feasible terms for trade between Singsong and Harmony?
A. 1 fish for 3 chickens B. 1 fish for 2-1/2 chickens C. 1 chicken for 1/5 of a fish D. 1 chicken for 1/3 of a fish
An important determinant of the price elasticity of supply is
A) whether the good is a durable or a nondurable. B) the time period firms have to adjust to a new price. C) how well consumers like the commodity. D) the proportion of the consumer's total budget spent on the good.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions remains the same. b. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions become more negative (or less positive). c. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions remains the same. d. There is not enough information to determine what happens to these two macroeconomic variables. e. The quantity of real loanable funds per time period and reserve-related (central bank) transactions remain the same.
List and describe the four broad categories of resources. Cite an example of each to help support your answer