A pack of cigarettes costs $6. At the age of 16, some people start smoking one pack per day or 365 packs a year. Assume there is no increase in the future price of cigarettes. How much retirement wealth are these people sacrificing if they smoke until reaching the age of 66?
A) $2,190 (=$6 * 365 days).
B) $ 109,500 (=$2,190 * 50 years).
C) $6.
D) $109,500 plus the compound interest income that could have been earned on the funds over the 50 years.
D) $109,500 plus the compound interest income that could have been earned on the funds over the 50 years.
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When a person consumes two goods (A and B), that person's utility is maximized when the budget is allocated such that:
A) the marginal utility of A equals the marginal utility of B. B) the marginal utility of A times the price of A equals the marginal utility of B times the price of B C) the ratio of total utility of A to the price of A equals the ratio of the marginal utility of B to the price of A. D) the ratio of the marginal utility of A to the price of A equals the ratio of the marginal utility of B to the price of B.
Along the Keynesian range of the aggregate supply curve, higher aggregate demand fails to stimulate output and only causes inflation
a. True b. False Indicate whether the statement is true or false
Other things being equal, the effect of an increase in the price of milk would be illustrated by
a. an upward movement along the demand curve for milk. b. a leftward shift in the demand curve for milk. c. a downward movement along the demand curve for milk. d. a rightward shift in the demand curve for milk.
The net worth of a bank is equal to: a. the value of the financial assets the bank can buy
b. its total assets minus its total liabilities. c. the value of the assets that all borrowers hold. d. the value of the money the bank keeps on hand and does not loan.