Consider a consumer choosing between spending her money on food, F, or clothing, C. Assume that a unit of food and a unit of clothing have the same price, and that the consumer can afford a total of 20 units of either food or clothing. If B stands for benefits then "B(F) + B(C)" is the:
A. constraint.
B. objective function.
C. optimization problem.
D. sunk cost.
B. objective function.
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Refer to the figure above. Which indifference curve depicts the highest level of utility?
A) IC1 B) IC2 C) IC3 D) IC4
Buy Airline Tickets over the Weekend A recent study by economists Steven Puller and Lisa Taylor found that airline tickets purchased over the weekend were priced 5% lower on average. Why would airlines charge lower prices to customers making bookings on the weekend?
Which of the following correctly describes the interest-rate effect?
a. If the price level decreases, consumer purchasing power decreases, the demand for credit rises, interest rates rise, debt-financed borrowing decreases, and real GDP demanded falls. b. If the price level decreases, consumer purchasing power increases, the demand for credit rises, interest rates rise, debt-financed borrowing decreases, and real GDP demanded falls. c. If the price level decreases, consumer purchasing power increases, the demand for credit falls, interest rates rise, debt-financed borrowing decreases, and real GDP demanded falls. d. If the price level decreases, consumer purchasing power increases, the demand for credit falls, interest rates fall, debt-financed borrowing increases, and real GDP demanded increases.
If some non-price level determinant causes total spending to decrease, then the effect on aggregate demand will be a: a. movement upward along the curve
b. movement downward along the curve. c. shift to the left. d. shift to the right.