Jamie's marginal utility from muffins and from doughnuts (in utils) is shown in the accompanying table. Jamie spends a total of $8 on muffins and/or doughnuts every morning. The price of each muffin is $2 and the price of each doughnut is $1.MuffinsPer DayMarginal UtilityPer MuffinDoughnutsPer DayMarginal UtilityPer Doughnut140220230415320510 If Jamie consumes 2 doughnuts a day, then what is her marginal utility per dollar spent on the second doughnut?
A. 15
B. 40
C. 10
D. 20
Answer: D
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Use the following diagram for the market for money to answer the next question.
The vertical money supply curve Sm reflects the fact that
A. bond prices and interest rates are inversely related. B. the rate at which money is spent is zero. C. the stock of money is determined by the Federal Reserve System and does not change when the interest rate changes. D. lower interest rates result in lower opportunity costs of supplying money.
Since Social Security is a pay-as-you-go program, the funds for the people retiring today
A) come from those of us working today and in the future. B) come from the Federal Reserve. C) come from import taxes. D) come from foreign sales of gold.
The marginal propensity to consume must always be larger than the marginal propensity to save.
Answer the following statement true (T) or false (F)
As disposable income decreases, the:
A. Average propensity to consume increases B. Average propensity to consume decreases C. Level of consumption increases D. Level of saving increases