If the marginal rate of substitution of X for Y is 2, the price of X is $3, and the price of Y is $1, a utility-maximizing consumer should
A. prefer 3Y to 1X.
B. be indifferent between 1X and 2Y.
C. choose less X and more Y.
D. choose more X and less Y.
Answer: C
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In the above figure, suppose the economy is in short-run equilibrium at point D. Which of the following is the best policy option for the Fed?
A) Increase taxes. B) Increase the required reserve ratio. C) Increase government spending. D) open market purchase of government securities
All else equal, when a monopolist increases its price, revenue will fall because of the lost sales
a. True b. False
Implicit costs are best thought of as:
a. variable costs. b. marginal costs. c. accounting costs. d. opportunity costs. e. sunk costs.
When you own part of a company and share in its profits, we say that you have:
A. credit with that company. B. intermediary stock in that company. C. financial diversification in that company. D. equity in that company.