Steve has two goods he can spend his income on, skiing and skating, and his marginal utilities from each are in the table above. The price of each unit of skiing is $10 and the price of each unit of skating is $5. Steve has $40 to spend
What quantities of skiing and skating should Steve consume to maximize his utility? A) 4 units of skiing and 4 units of skating
B) 2 units of skiing and 4 units of skating
C) 1 unit of skiing and 2 units of skating
D) 5 units of skiing and 5 units of skating
B
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In the table above, how many jackets must Mark forgo for every dress he makes?
A) 2/3 of a jacket B) 1 jacket C) 24 dresses D) 16 jackets E) 1 1/2 jackets
Increased liquidity in the banking system occurs when ________
A) people buy more bonds B) the demand for real money balances declines C) banks buy more bonds from the central bank D) all of the above E) none of the above
In a two-asset economy with money and T-bills, the quantity of money that people will want to hold, other things being equal, can be expected to:
a. increase as the real GDP interest rate increases. b. decrease as the real GDP interest rate increases. c. decrease as real GDP increases. d. none of these.
The law of diminishing marginal utility guarantees that demand curves will have positive slopes
a. True b. False Indicate whether the statement is true or false