The marginal rate of substitution is the
A. change in the quantity of one good that just offsets a one-unit change in the consumption of another good such that the total satisfaction remains constant.
B. same thing as the marginal utility of a good.
C. rate at which the consumer can exchange one good for the other.
D. change in the quantity of one good that changes the utility received by one unit.
Answer: A
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Given the following information about AAA bank:
What is the reserve ratio?
A. 50 percent B. 30 percent C. 20 percent D. 15 percent
Scarcity of resources
A. affects market, but not public sector decision making. B. affects both market and public sector decision making. C. affects public sector, but not market decision making. D. is really not an issue in such a wealthy nation as the United States.
A consumer makes purchases of an existing product A such that the marginal utility is 40 and the price is $20. The consumer also tries a new product B and at the current level of consumption it has a marginal utility of 72 and a price of $24. What does
the utility-maximizing rule suggest that this consumer should do? What will be an ideal response?
Assume the U.S. government wants to hold the value of the dollar at $1.00 U.S. equals 7 Chinese yuan, but it finds that the value of yuan is depreciating against the U.S. dollar. What would be an appropriate policy to reverse this trend?
A. Increase the money supply in the U.S. B. Increase government spending within the U.S. C. Sell U.S. dollars. D. Buy U.S. dollars.