Teddy buys only chocolate chip cookies and hot chocolate and spends all of his income on the two items. Suppose that Teddy's marginal utility per dollar from cookies exceeds that from hot chocolate. Teddy can make himself better off if he buys
A) more cookies and less hot chocolate.
B) fewer cookies and more hot chocolate.
C) an equal amount of cookies and hot chocolate.
D) only hot chocolate.
A
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Recall the Application. If it is not known whether the decrease in price of illegal drugs is primarily due to a change in supply, a change in demand, or equal changes in both, the equilibrium quantity of drugs
A) will increase. B) will decrease. C) will not change. D) may or may not change.
When disposal income is $5.0 trillion, consumption expenditure is $4.5 trillion. When disposal income is $6.0 trillion, consumption expenditure is $5.0 trillion. What is the marginal propensity to consume?
What will be an ideal response?
Federal deposit insurance in the United States began in
A) 1864. B) 1933. C) 1968. D) 1984.
Symmetric information
A) is the same as perfect information. B) holds under the assumption of rational expectations. C) is true only in efficient markets. D) means that savers and borrowers have the same information.