If an individual is maximizing his or her utility, his or her marginal rate of substitution of leisure hours for consumption will be:
a. equal to one divided by his or her wage rate.
b. greater than one divided by his or her wage rate.
c. equal to his or her wage rate.
d. less than his or her wage rate.
c
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Which of the following would lead to an increase in the supply of ethnic restaurants in a college town?
A) An increase in the wages paid to restaurant workers B) An increase in the price of American chain restaurants, and consumers regard American chain restaurants and ethnic restaurants as substitutes C) An increase in the demand for ethnic restaurants D) All of the above. E) None of the above.
In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed
A) sold $200 in government bonds. B) sold $500 in government bonds. C) purchased $200 in government bonds. D) purchased $500 in government bonds.
When borrowing is done in a foreign currency and lending is done in the domestic currency, what event creates a downturn in the economy?
a. a deprecation of its exchange rate b. an appreciation of its exchange rate c. an appreciation of its interest rate d. a depreciation of its interest rate
The general category of taxes that include unit taxes, sales taxes, and customs duties, is known as a(n)
a. excise tax b. internal tax c. external tax d. estate tax e. property tax