Becky decides to spend $50 per month on DVD rentals and movie tickets. Her marginal utility schedules from these two goods are shown in the table above. The price of a DVD rental is $2.50, and the price of a movie ticket is $5
Suppose Becky rents 8 DVDs and buys 6 movie tickets per month. She A) cannot increase her total utility because she already gets the maximum possible utility from DVD rentals and movies within her budget.
B) can increase her total utility if she rents more DVDs and buys more movie tickets.
C) can increase her total utility if she rents more DVDs and buys fewer movie tickets.
D) can increase her total utility if she rents fewer DVDs and buys more movie tickets.
D
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Discretionary fiscal policy
A) may not have desired effects on real GDP because it leads to decreases in aggregate demand. B) may not have desired effects on real GDP because of the time lags. C) would have a larger effect on real GDP if the multiplier was smaller. D) may not have desired effects on real GDP because it leads to increases in aggregate demand.
In the 2000s, low savings rates are attributed to
A) rapid economic growth. B) stock market boom. C) declining interest rates and increased refinancing of the mortgages. D) inefficient monetary policy.
All of the following are true regarding transfer prices except which one?
A) The transfer price is the internal firm price on an input that input-producing division charges the input-using division. B) The transfer price is the internal firm price on an input that input-using division charges the input-producing division. C) Law in many nations state that a transfer price must equal the price charged to an independent customer. D) Transfer prices can affect the taxes a firm must pay.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.