Stella's marginal utility of the last unit of X consumed is 18 and her marginal utility of the last unit of Y consumed is 12 . What prices for X and Y, respectively, are consistent with Stella being in consumer equilibrium?
a. $4 and $6
b. $12 and $18.
c. $15 and $15.
d. $12 and $8.
d
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The welfare analysis of advertising is controversial because evaluation of the effect of advertising on aggregate surplus depends on:
A. the marginal cost of the advertising. B. whether the inframarginal consumer is influenced by the advertising. C. whether the advertising is tied to a quality increase. D. the reason it succeeds in increasing demand.
IBM buys treasury bonds from the UK as part of its investment portfolio. This is an example of:
A. importing. B. foreign direct investment. C. exporting. D. foreign portfolio investment.
Human capital is best defined as:
A. the productive skills and knowledge that workers acquire from education and training. B. the substitution of labor for machinery in the production process. C. any piece of machinery that must be combined with labor to be productive. D. the exchange of money for real assets.
When a foreigner buys shares in a U.S. company, the transaction
A. is registered as a debit in the capital account, and it increases private U.S. assets abroad. B. is registered as a credit in the capital account, and it decreases foreign private assets in the United States. C. is registered as a debit in the current account, and it decreases private U.S. assets abroad. D. is registered as a credit in the capital account, and it increases foreign private assets in the United States.